Just four years ago business was booming for Northstar Offshore Group.
The small Houston-based oil and gas firm spent $160 million to snatch up more than a dozen oil fields beneath the shallow waters off the coast of Louisiana.
At the time U.S. producers were enjoying some of the highest crude oil prices on record and lending to the country’s energy sector was flowing as freely as a freshly tapped well.But after U.S. producers took former Republican vice presidential candidate Sarah Palin’s ‘drill, baby, drill’ mantra to heart when oil prices were high — and borrowing heavily to fuel growth — this bounty has turned into an unwanted glut – costing tens of thousands of U.S. jobs and sending oil-dependent state budgets reeling.
Today Northstar has become one of the latest casualties of the rapid growth in oil and gas extraction that’s hammered prices down from about $120 per barrel of crude in 2012 to about $45 this week.
Last month the company became the 102nd U.S. or Canadian oil and gas company to file for bankruptcy since the start of last year – according to a monthly report released this week from global law firm Haynes and Boone.
This crash in prices has made 2016 one of the worst years on record for industry bankruptcies since a similar global oil glut in the 1980s wiped out scores of energy companies.