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marmar

(76,982 posts)
Tue Jan 26, 2016, 08:11 AM Jan 2016

Banks Much Deeper in the Hole on Oil & Gas Collateral than they Pretend


Banks Much Deeper in the Hole on Oil & Gas Collateral than they Pretend
by Wolf Richter • January 25, 2016


[font color="blue"]“All of it is in the gutter.”[/font]

An asset is ultimately worth what a buyer is willing and able to pay for it. That price turns out to be terribly low for oil and gas assets. This is a big problem for banks, which used these assets as collateral for energy loans they extended during boom years — a much bigger problem than suggested by the current spate of puny additions to loan loss reserves.

Natural gas driller Quicksilver Resources, which filed for Chapter 11 in March last year, sent an email to its remaining employees Friday night at 11 p.m. to announce the sale of all of its US oil & gas assets, the Fort Worth Star Telegram? reported. Saturday morning, it filed the documents in bankruptcy court in Delaware. The judge has to approve the deal.

The price it got for its US assets is an eye-opener.

The company, which is based in Fort Worth, TX, also owns some assets in Canada which it will try to sell separately. But they’re not included in the bankruptcy. When it filed for bankruptcy, it listed $2.35 billion in debts and only $1.21 billion in assets. “The rest was drilled into the ground to never be seen again,” I wrote at the time.

Only it’s a lot worse. All it got for its US assets was a paltry $245 million. ...................(more)

http://wolfstreet.com/2016/01/25/banks-in-much-deeper-hole-on-oil-gas-collateral-than-they-pretend/




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Banks Much Deeper in the Hole on Oil & Gas Collateral than they Pretend (Original Post) marmar Jan 2016 OP
Interesting comments also. Thank you LiberalArkie Jan 2016 #1
Yep. Those who fund Wall St are the ones who choose bribery over democracy. raouldukelives Jan 2016 #2

LiberalArkie

(15,686 posts)
1. Interesting comments also. Thank you
Tue Jan 26, 2016, 08:35 AM
Jan 2016

Ptb
January 25, 2016 at 6:26 pm
I think you’ve hit upon what the media will not state very plainly, but everyone knows….any politician that takes money from wall street is bought and paid for. And thus the attraction to Trump and Sanders.

Reply
David Calder
January 25, 2016 at 6:46 pm
Ptb, I think you are exactly right. The reason Sanders says he can appeal to Trump supporters is because those two are the only ones who have attacked Wall Street. Hillary has done a little “me too” but no one trusts anything she says. Too many rich speaking fees from the banks and videos attacking homeowners who got burned in 2008

raouldukelives

(5,178 posts)
2. Yep. Those who fund Wall St are the ones who choose bribery over democracy.
Tue Jan 26, 2016, 10:01 AM
Jan 2016

It is no secret it is occurring. They just prefer standing with Honeywell and Chevron over standing with the least.

And that is fine, it is a free country. They love money for themselves more than representation for all, but sadly, many of them still try to pretend they care about us. And that, is disingenuous to the core.

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