More than 200 oil and gas companies in North America have filed for bankruptcy since 2015, and the list of casualties could continue to climb this year.

From 2015 through November of last year, 208 companies filed for bankruptcy, according to a new report from law firm Haynes and Boone. Those filings involved a combined $121.7 billion in debt.

Since the last update from Haynes and Boone at the end of the third quarter last year, nine firms went bankrupt. In fact, in 2019, bankruptcies surged by 50 percent compared to a year earlier, and hit the highest number since 2016.

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The rate of bankruptcies could accelerate this year as the price of natural gas recently tumbled below $2/MMBtu and crude oil prices have fallen back once again. “I think the trend line should be moving up in the first half of 2020,” Buddy Clark, partner at Haynes and Boone, told Reuters.

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The IEA predicts that the oil market will remain in a state of surplus this year, even after taking into account the recent OPEC+ cuts. The IEA said that OPEC+ may need to cut deeper in order to avoid a chronic surplus.

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The problem for the sector is the tidal wave of debt that comes due in the next few years. According to the Wall Street Journal, North American oil and gas companies have a combined $200 billion in debt that matures over the next four years, with $40 billion due this year alone.

The financial stress is causing a slowdown in the pace of drilling. Already, gas production in the all-important Marcellus shale may have come to a halt. The EIA sees gas production contracting in the Anadarko, Appalachia, Eagle Ford and Niobrara shales. As for oil, US production growth is expected to rise by 22,000 bpd in February, a tepid rate compared to typical months last year and the year before. Some shale basins are facing decline, including the Anadarko, Eagle Ford and Niobrara.

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But less drilling has knock-on effects, dragging down oilfield service companies which make their money on drilling activity. The same is true for pipeline companies, which make their money on oil and gas flows. Kinder Morgan just announced a $1 billion impairment charge on one of its gas pipeline assets.

Halliburton also announced a 21-percent decline in revenue in the fourth quarter in its North American division, due to weaker activity and pricing reductions. “The US shale industry is facing its biggest test since the 2015 downturn,” Jeff Miller, Halliburton CEO, said on an earnings call on January 21. “As expected in the fourth quarter, customer activity declined across all basins in North America land, affecting both, our drilling and completions businesses. The rig count in US land contracted 11% sequentially and completed stages had the largest drop we have seen in recent history.” (RT)