Energy and petroleum bankruptcy filings have continued to dwindle over the summer; however pricing pressures could lead to renewed distress in the sector in the coming months, law firm Haynes & Boone reports.

The pace of bankruptcy filings by North American exploration and production companies has slowed down dramatically so far this year compared to last year, according to the firm's latest Oil Patch Bankruptcy Monitor.

As of July 31, fourteen oil and gas producers had filed for bankruptcy in 2017, representing approximately $5.1 billion in cumulative secured and unsecured debt, according to the firm. Since the beginning of 2015, the firm has tracked 128 North American oil and gas producers that have filed for bankruptcy, while there have been 144 oilfield service bankruptcies.

While five E&P companies with cumulative debt of $77 million filed for bankruptcy in June, there were no E&P company bankruptcy filings during the months of May or July.

“Many companies that needed to restructure either have gone through bankruptcy or reached out-of-court settlements with creditors. Broadly speaking, the U.S. E&P industry seems to have adjusted to the new $45-55/bbl. price range for the near term," said Haynes and Boone Partner Ian Peck, who chairs the firm’s Restructuring Practice Group.

However, Peck added:  “Despite the industry’s new stability at this price point, a prolonged pricing trough may ultimately be too difficult for some players to bear, so additional companies may experience distress and seek bankruptcy protection in the coming months, including some that completed debt restructurings early in this down cycle.”

Click here to view the report in its entirety.