Oil is $50/barrel yet oil companies going bankrupt?

[financial-markets]

How can oil sector companies go bankrupt when oil is same price as it was in 2005?

It is because oil and and natural gas companies cannot get financing and their debts are being called. and interest rates is higher.
The anti-oil and divestment means less cash for loans which is essential to explore for new oil. these companeis cannnot get loans to stay in business and go bankrupt and liquidate assets.
so it's not the price of oil that is the problem in the sector

its paradigm shift in environmentalism and gov't inaction or even gov't is anti-oil and thinks oil companies are getting subsidized?

oil stock like mining stocks requireing huge upfront investment before any returns on investment much like real estate sector. investors whether bondholders or shareholders have only the oil in the ground as assets when lending money.with gov't regulations ,lending money to this industry now carries political risk, and taxes etc. and environmental protestors it seems like the public an gov't want this industry shut down due to 'global warming' and al gore guys. who are anti-oil anti-pipelines etc. and Bernie Sanders guys

in the 80's and 70's oil in the US and Canada was sign wealth and prospertiy and even TV show called Dallas and about oil..

now oil is most hated commodity. investors dont want invest in the shares or even lend money to the sector. it's like tobacco yet lots of people consume the product.

thousands of jobs are lost in Canada, US and but you go to othe roil producing OPEC there is no anti-oil or environmental anti-oil and their companies even get gov't loans. for oil productoin etc.

 

[mukoh]

You are looking at the $50 oil for typical wells.
Most oil companies going banko are shale/sand etc. Cost to produce + transport is in and or around $60-$75 sometimes more.
Financing for new wells? When oil is at $50 who is going to finance a new well or exploration knowing that $60+ is going to be the cost to get the oil to the refinery.

 

[financial-markets]

it's because of lots of investors now ban investing in oil and natural gas companies or lending money to them.
the risk is gov't risk now. The gov't can ban oil and natural gas 'extraction' and there goes you loan as it was the oil and natural that was 'collateral' . The financing of new oil exploration et was for like 10-20 years projects.. and oil probably go higher in 10 years. but people now see risk as the oil may not be extracted due to gov't risk. or able to sell their bonds. so no loans. no financing, no jobs. no investment.

pension funds, hedge funds are divesting from fossil fuels. that limits the liquidity or risk of your investment to exit if you need cash.

oil sector was booming with jobs and investment even when it was trading at $40-$50/barrel. investors were willing ot hold on to their oil and natural gas investment but are no longer long term investments. its like tobacco..they want dividends today. for oil companies have 'depleting asset' on their balance sheets. the only 'growth' was oil company 'exploration' or rise in oil prices other than that these companies have depleting asset. it easy to analyze the worth of these companies. as they sell a commodity. unlike other businesess.

You are looking at the $50 oil for typical wells.
Most oil companies going banko are shale/sand etc. Cost to produce + transport is in and or around $60-$75 sometimes more.
Financing for new wells? When oil is at $50 who is going to finance a new well or exploration knowing that $60+ is going to be the cost to get the oil to the refinery.