The First Shale Casualty: WBH Energy Files For Bankruptcy; Many More Coming

Tyler Durden's picture

"There are too many ugly balance sheets," warns one energy industry analyst, adding simply that "the group is not positioned for this downturn." While the mainstream media continues to chant the happy-clappy side of lower oil prices, spewing various 'statistics' about how the down-side of low oil prices is 'contained' and the huge colossal massive tax cut means 'everything is awesome' for America, the data - and now actions - do not bear this out. Macro data has done nothing but disappoint and now, we have the first casualty of the shale oil leverage debacle as WSJ reports, on Sunday, a private company that drills in Texas, WBH Energy LP, and its partners, filed for bankruptcy protection, saying a lender refused to advance more money. There are many more to come...


In December we illustrated the problem names (in the publicly traded markets) among the most-levered energy companies in America...



And now, as The Wall Street Journal reports, the bankruptcies have begun as financing costs are not just prohibitive, there is no liquiidty available at any price for many...

American oil and gas companies have gone heavily into debt during the energy boom, increasing their borrowings by 55% since 2010, to almost $200 billion.


Their need to service that debt helps explain why U.S. producers plan to continue pumping oil even as crude trades for less than $50 a barrel, down 55% since last June.


But signs of strain are building in the oil patch, where revenue growth hasn’t kept pace with borrowing. On Sunday, a private company that drills in Texas, WBH Energy LP, and its partners, filed for bankruptcy protection, saying a lender refused to advance more money and citing debt of between $10 million and $50 million. Neither the Austin-based company nor its lawyers responded to requests for comment.


Energy analysts warn defaults could be coming. “The group is not positioned for this downturn,” said Daniel Katzenberg, an analyst at Robert W. Baird & Co. “There are too many ugly balance sheets.”




In 2010, U.S. companies focused on producing oil and gas had $128 billion in combined total debt, according to financial data collected by S&P Capital IQ.


As of their latest quarter, such companies had $199 billion of combined total debt.



Before crude prices began falling, U.S. oil and gas producers were able to acquire leases and drill wells even if that meant outspending their incomes. Debt was used to bridge the cash shortfall so that companies could develop oil fields in Texas, North Dakota and newer locations including Colorado.

Now that is coming back to bite.

The upshot of cash conservation and higher borrowing costs will be less money spent on producing oil and natural gas. Concho Resources Inc. said late Monday that it was cutting its capital spending budget by a third, to $2 billion.

*  *  *

And the credit market knows it...


And here is the bankruptcy filing in question in all its glory:


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NotApplicable's picture

Surely GS can package up some oil backed securites to sell to Yellen?

SMG's picture

Not only is that already done, they have sold trillions in derivatives on those securities as well, just like they did with mortgage debt in the 2000s.   Good thing that turned out OK.

USisCorrupt's picture

Nothing to see here, move on.

TeamDepends's picture

Good thing Solyndra will captain us into an oil-free future.

Tall Tom's picture

Are these unintended consequences from terminating QE?


I do not buy that. There are no accidents.


1) Get them into debt.

2) Remove Market Liquidity

3) Seize assets upon subsequent Bankruptcy.

4) Open Credit Spigot, sell them assets, and Get them into debt.

5) Remove Market Liquidity






It seems to work. But few seem to notice and far fewer seem to care. But the Banks make out like bandits.


Yes there will be more Bankruptcies.


The people at Goldman Sachs want to express their appreciation for your active and passive complicity in this crime.


Without YOUR SUPPORT this would not be possible.


Thank you muppets.




Dubaibanker's picture

As a follow up to my message of Dec 23, 2014 where I projected that Saudi/OPEC is responsible for the decline in the price of oil. My theory was right and now the MOST IMPORTANT reason has appeared as to why Saudi/OPEC are doing so.

I have had a EUREKA moment over the New Year holidays/last weekend when I discovered why the price of oil maybe going down! 

This is going to change the world and is happening for the first time in hundreds of years that we may not need oil/gas any more for vehicles, homes or most other things. 

A new source of energy has most likely been found!

This is potentially a new step forward for all mankind.

This video explains in the most basic form what we are talking about here: 

Cold Fusion and LENR Update:

This energy source was claimed since last year but now has been independently verified by 3 different sources.

Firstly, the main source being the Royal Swedish for Sciences committee, who decides whom to give the Nobel Price in Chemistry every year, has determined that this new energy source is real!

 The day this independent verification came was on Oct 6, 2014. 

 You can see the historical price of oil. The price of oil was at or above USD 90 until Oct 6, 2014 and then something happened.....and the price has declined very rapidly and very radically by almost USD 2 every 3 days!!........

 The main and perhaps the most important reason for this price collapse since Oct 6, 2014 is this report that was published on the same date:

 This report must be read by all but most importantly by people who have an understanding of physics and/or chemistry. This report is prepared by 6 famous PhD scientists, two of whom are associated with the Royal Society of Technology, Sweden that grants the Nobel Prizes!

 The stamp of approval by 6 leading PhD scientists is what gave this technology the boost and credibility. The experiment was conducted in Switzerland by scientists from Sweden and Italy.

 The conclusion of the report is what makes this report so mind blowing:

 "In summary, the performance of the E-Cat reactor is remarkable. We have a device giving heat energy compatible with nuclear transformations, but it operates at low energy and gives neither nuclear radioactive waste nor emits radiation."

 From Page 27: "The result from the heat measurement is remarkable by giving such a large amount of heat from the very small quantity of fuel powder used confined in the small volume of the reactor."

 Secondly, not only was this source of energy confirmed by Sweden and Italian scientists (from the oldest University of Bologna in the world from 1,088 AD) from Nobel Prize academy but a Russian scientist has also independently verified this new source of energy:

 The last sentence at conclusion of this report is what changes the whole world in the world of energy and is the dynamite:

 "This device does produce  more energy than it consumes."

  The third independent evaluation as done by Cornell University, USA who used a different set of scientists and their conclusion was the same:

 "The two test measurements described in this text were conducted with the same methodology on two different devices: a first prototype, termed E-Cat HT, and a second one, resulting from technological improvements on the first, termed E-Cat HT2. Both gave indication of heat production from an unknown reaction primed by heat from resistor coils. The results obtained indicate that energy was produced in decidedly higher quantities than what may be gained from any conventional source."

 "Even from the standpoint of a “blind” evaluation of volumetric energy density, if we consider the whole volume of the reactor core and the most conservative figures on energy production, we still get a value of (7.93 ± 0.8) 102 MJ/Liter that is one order of magnitude higher than any conventional source.

 Lastly, it must be remarked that both tests were terminated by a deliberate shutdown of the reactor, not by fuel exhaustion; thus, the energy densities that were measured should be considered as lower limits of real values."

 Link from Cornell University: (Please click on PDF at right top)

quasimodo's picture

Remind me again how this can be put into a fuel tank on anything with four(or more) wheels.

Vampyroteuthis infernalis's picture

I went short 4 fracking companies about a month ago. Two of them were on the list. Just wait a few more weeks and the shorts will pay big time!

MillionDollarBonus_'s picture

Finally, some justice for the absolutely UNNACCEPTABLE damage that fracking companies have done to the environemnt. Fracking is evil, and needs to be banned. This oil price collapse is just what we need to end frackning once and for all. This is a victory for environentalists all over the world and a huge blow to corporate interests.

Bunghole's picture

Oh, you're gonna piss off some uniformed ZH'ers with that.

WarHorse's picture

Bunghole - it's you and MDB that are uninformed.  The environmental damage created by fracking is no more ruinous than that generated by traditional production methods.  Many would argue its safer.  But, I suppose you favor far more expensive and far less efficient alternative energy strategies only.  You ought to consider joining the rest of us in the real world where PRACTICALITY dominates

Slave's picture

I bet the chosen ones own all of the shale companies the next time oil goes way back up.

Jeff the Terrible's picture
Jeff the Terrible (not verified) Slave Jan 7, 2015 3:40 PM

USPTO has been jerking Andrea Rossi around on his patent application.  The fact they are doing that tells me he is on to something.

His name is Andrea Rossi.

Four chan's picture

oil can stay lower longer than the speculators can stay solvent. 

MontgomeryScott's picture

A quote from either a WWII propaganda movie, or a Vietnam propaganda movie, comes to mind.



Never One Roach's picture

It's good to see Barry and his Saudi Buddies bring Putin to his knees ....


oh, wait a sec ....

Redneck Hippy's picture

ZH has a uniform?  Where do I get mine?

Not Goldman Sachs's picture

I bought a couple of zh t-shirts. Though I love the hedge, the t-shirts are thin material. Avoid.

eddymunster's picture

They are great for wet T-shirt contests however.

MontgomeryScott's picture

Well, if you go into the bathroom and rip your t-shirt off, and aren't afraid of what you see in the mirror...

Rusty Shorts's picture





You are not your bank account
You are not the clothes you wear
You are not the contents of your wallet
You are not your bowel cancer
You are not your grande latte
You are not the car you drive
You are not your fucking khaki's



Fight Club - This Is Your Life

Blano's picture

Welcome back!!

Green arrow for showing up.

Dave's picture

MDB this one's for you baby. I'm on the North Slope right now about to move a rig out on the tundra. I will be drilling a horizontal well and doing a 6 stage frac job. Just so you know, we ain't all going bankrupt...

Teamtc321's picture

Don't loose sight of a possible geo-political event. with all the pressure on many countries, IMO this possibility could trigger a quick price spike......

MDBurger, you are such a fucking moron.

Citium's picture

You have been here 4 years. You do understand MDB is the resident troll right? He spouts the opposing view of the article he is commenting on. It is supposed to be funny and ironic but it never fails to net the people that believe he is serious. It's as amusing as his posts themselves. However, MDB has had some classics that I have got a good chuckle out of.


*Unless your comment was endearing like the big lebowski:

The Dude: Walter, I love you, but sooner or later, you're going to have to face the fact you're a goddamn moron.

Tall Tom's picture

How do you like Liberal's comments?


Those posts are nowhere near as subtle as MDB but it is great.


But MDB is an artist. Yes. I have to agree.

post turtle saver's picture

easy... it creates current via generator, you buy the current in the form of kWh to charge your electric vehice, and away you go

ThroxxOfVron's picture

Rube diverse nucular ozzmosis goldberg.

It runs on cheese whiz mostly.  Smells like hormel chili-mac when it's cookin'.

Winston Churchill's picture

Shame we still don't have the battery technology to use that energy, if true.

With what we do have, it will still be a very different world.

Then theres plastics and fertilizers to consider.

Maybe another 120 years may crack that particular battery problem,deep discharge cycling,but

maybe not.A lot of money has already been spent for naught,trying to solve it.

post turtle saver's picture

deep cycle battery tech is older than dirt... Tesla is packing 50 kW into their battery packs and expects that performance to increase by 40-50% every five years... the tech is already here to address the majority of vehicle mission profiles for personal use... yes, we'll always have need for hydrocarbons, but the original question was "how do I power four wheels with this" and the answer is "we already know how to, it's just another heat source as far as we're concerned"... QED

Winston Churchill's picture

Sure is, shame it applies to the modern batteries as well.

There has been no breakthrough, at least according to the research director of one of the

biggest battery companies in the world.

I'm sure you are better informed than him though ?

post turtle saver's picture

it's already documented fact that battery packs from the Tesla Roadster to the Model S gained 50% improvement in capacity and recharge behavior... this is over a five year period... the battery techs have already said this target can be reached on the next five year cycle... that would be Panasonic that you're alluding to, btw, and yes I've read their work, it's a conservative target and well within the realm of possibility... if it wasn't, Gigafactory wouldn't be in the plans as that's a joint Panasonic / Tesla venture...

btw you can still find archives on line of MIT researchers stating that putting a man on the moon is impossible and shouldn't be attempted... just goes to show...

Winston Churchill's picture

I've read similar forecasts.

They were written in 1906.

There is one born every minute.TESLA fan that is.

post turtle saver's picture

look, you need to give it a rest when you're proven wrong... you ask where the battery tech is, I provide examples which basically show it's already here (hell, it's available in more hybrids and EVs today than you can shake a stick at), and your response is to stick your head in the sand and call me a "Tesla fan", whatever the fuck that's supposed to bring to the discussion...

this is just like you when you stepped in it spitting mad bullshit about the "Silk Road" and how useless the US Navy is in policing it, while forgetting that half the trade associated with that term is maritime traffic... the first rule when you're in a hole is to stop digging, suggest you put down the shovel before you hit the other side and need to learn Mandarin at this rate...

corsair's picture

Forget batteries. If this energy is viable, why are Russians bending over backwards to secure their (future) Arctic operations?

MontgomeryScott's picture

Tell your happy story to the families of the thousands whose battery factory contaminated their land, and killed the thousands in Bhopal, India.

DOW CHEMICAL: Fucking billions for the millions, ever since 1933!

post turtle saver's picture

that has fuck all to do w/ what we're talking about... the world is going to make batteries somewhere regardless

Dave's picture

I don't recall that being a battery factory.

Tall Tom's picture

Perhaps you cannot put that reactor into an automobile....


But anything which produces NET HEAT can be utilized to GENERATE ELECTRICITY.


The Modern Internal Combustion Engine is 98% INEFFICIENT. Most of the heat generated is radiated to the atmosphere and wasted.


But Electric Motors are much more efficient.


There are Electric Cars, you know?


I will read the report. If Cold Fusion has truly been acheived then that is a ray of hope in an otherwise dismal world.

post turtle saver's picture

agree, your typical modern ICE has a thermal efficiency of around 22-28%

noben's picture


post turtle saver's picture

he's spot on, there are plenty of references to choose from but frankly you can calculate it... here's one as an example...

Dubaibanker's picture

Tall Tom and others.....Someting has indeed happened in the last few months...Bill Gates is visiting Italy to learn about LENR...oil price is massively down.....not one country's Govt has screamed yet about the massive decline in prices (perhaps because they know the future technology and the coming demise of oil based world?)....large oil companies who have ruled the world since only the past 100 years, are selling their assets like there is no tomorrow...Google, Apple and Microsoft are larger than Exxon after several years....reports on LENR are being published from various sources....Swedish Utilities CEO has spoken.......Toyota has just declared yesterday to give away billions of dollars worth of research and patents for FREE....there is something developing..........and it has to be something sensational...Saudi/OPEC and all oil exporting nations have perhaps realised that their future is in a big trouble (are therefore diversifying and opening up), hence they are causing mayhem now instead of being losers in couple of years down the road and destabilising the rest of the world so that they bring the entire West down today when their banks are weak, economies are fragile and don't want to give time for the West to plan the growth of this new teachnology and come ahead of the Saudis/Middle East/OPEC? .....Why has so much happened since the Oct 6 report?...Could it just be true and change our entire world as we know it?....Let's discuss....


This is what the US Pentagon / Military had to say in 2009 and comes from a recently declassified document:

 "Outlook and Implications

 If nuclear reactions in LENR experiments are real and controllable, DIA assesses that whoever produces the first commercialized LENR power source could revolutionize energy production and storage for the future. The potential applications of this phenomenon, if commercialized, are unlimited. The anomalous LENR effects seen in these metal lattices containing deuterium may also have as-yet undetermined nanotechnology implications. LENR could serve as a power source for batteries that could last for decades, providing power for electricity, sensors, military operations, and other applications in remote areas, including space. LENR could also have medical applications for disease treatment, pacemakers, or other equipment. Because nuclear fusion releases 10 million times more energy per unit mass than does liquid transportation fuel, the military potential of such high-energy-density power sources is enormous. And since the U.S. military is the largest user of liquid fuel for transportation, LENR power sources could produce the greatest transformation of the battlefield for U.S. forces since the transition from horsepower to gasoline power."

 On Oct 9, 2014, CNN also published a report from a scientist:

At Last, Fuel For Our Dreams

A quote from the CNN report: "Said nuclear physicist and 1973 Nobel Prize laureate Brian Josephson, in an Oct. 12 letter to Nature, the world's pre-eminent science journal, "The report not only confirms output power far in excess of anything possible by chemical reaction, but also gives a clear indication that a nuclear reaction is occurring, on the basis of a substantial change in the isotopic proportions of Li and Ni over the period of the run,"

"A source of energy that produces three times more energy than it uses to sustain itself? It sounds like a violation of the laws of physics, and certainly puts a dent in the theory of conservation of energy, which says energy can neither be created nor destroyed."

 "But, as I have said elsewhere tonight, the countless millions of people who live without clean water, lights, communications and fuel, who haunt this world like the ghosts of great wars and vanished civilizations, are the real beneficiaries of this technology, of Andrea Rossi's "impossible invention" and dreams as old as humanity."


 This article sums up the benefits of this new energy source quite well:

 "What is publicly known about LENR research is just the tip of the iceberg. Many big-name companies are involved, including Toyota, Honda, Mitsubishi, Volvo, and many more, as well as government and military organizations, such as the Space and Naval Warfare Systems Command (SPAWAR), the Defense Advanced Research Projects Agency (DARPA), and the National Aeronautics and Space Administration (NASA). LENR research is not all about one man or one company; It is a global search for scientific truth and a practical way to solve the global energy crisis.

 LENR produced energy will be so low in cost that subsidies and mandates for using pollution free LENR products will be totally unnecessary. Finding a low cost, reliable replacement for fossil fuels is the only foreseeable positive economic force that can bring back the American dream. Only nuclear power has the high energy density and 24-7-365 reliability needed to replace fossil fuels. There is just no other choice."

 Low Energy Nuclear Reaction passes big test in Switzerland

 8 clean-energy stories that brightened our world in 2014

 Of all the people in the world, the richest man in the world and Microsoft Founder, Bill Gates visited Italy on Nov 17, 2014 to meet and discuss the same development of nuclear fusion without radioactivity or any harmful residue:

 This is what the CEO of Swedish Electric Utilities company had to say in Nov 2014:

 "If it is possible to safely operate and control these reactions that are now believed to be nuclear reactions, we may see a fundamental transformation of our energy system. Electricity and heat could then be produced with relatively simple components, facilitating a decentralization of energy supply that could be both inexpensive and part of a solution for global climate change."


An American investor has actually bought the patents from this Italian scientist for this technology:

 Raleigh investor Darden still bullish on controversial nuclear technology

 Confirmed: Raleigh’s Cherokee buys into controversial nuclear tech device

LawsofPhysics's picture

LOL!!  The fuel for the current best performing fusion reaction is extremely expensive to produce and requires a lot of energy itself to manufacture.

Good luck with all that.  You need to read some more primary literature.

Dubaibanker's picture

Thanks. Laws of Physics.

What is your response after reading the conclusion of the 6th Oct 2014 report

"In summary, the performance of the E-Cat reactor is remarkable. We have a device giving heat energy compatible with nuclear transformations, but it operates at low energy and gives neither nuclear radioactive waste nor emits radiation."

 From Page 27: "The result from the heat measurement is remarkable by giving such a large amount of heat from the very small quantity of fuel powder used confined in the small volume of the reactor."

 And what about this revised US patent application of Sept 25, 2014: