The north American oil and gas industry has continued to struggle this year, with 84 companies filing for bankruptcy protection and a record $89 billion in debt, according to Norway's independent energy research group Resta Energy. It will be harder for North America's oil and gas industry to emerge from a mess of high debt, lacklustre investment and weak downstream demand.

Investment levels are back to "yesterday". As we all know, the pandemic has weakened demand in the global oil market, with global upstream spending in the oil and gas industry dropping 29 percent this year to $383 billion from $539 billion in 2019. North America's shale oil and gas sector saw the biggest drop of more than 50 per cent. North American oil and gas investment is back to pre-shale levels. Without strong financial support, it is inevitable that exploration and development will stagnate, so how can we make profits?

Oil and gas company stock index plummeted, the market is not optimistic. Us oil and gas companies, such as shale developers, have been particularly at risk this year as the spread of the epidemic has devastated the US economy and triggered an unprecedented wave of bankruptcies. As of early October, despite a slight uptick in the overall U.S. stock market over the past year, the broader index of U.S. oil and gas companies has fallen about 57%, including big oil companies such as Chevron Corp. and ExxonMobil Corp., which have also seen their shares tumble in response to low oil prices.

A wave of bankruptcies has taken hold. In the first nine months of this year, the average north American oil and gas company that filed for bankruptcy protection had $1.05 billion in debt, nearly doubling from $576 million in 2017. At current prices, bankruptcies in North America are expected to continue for the rest of the year. Notably, no more than 40 large U.S. companies filed for bankruptcy during the 2009 financial crisis.

The purse is too tight to carry on. Assuming average WTI crude oil prices and average North American natural gas prices remain at current levels this year, the debt of insolvent exploration and production companies in North America is expected to reach a new high by the end of the year.

In the current market environment, a large number of small and medium enterprises and private oil and gas producers are facing severe financial pressure. These companies may not be able to meet their debt service contracts in the next two years. Moreover, this wave of North American oil and gas bankruptcies is markedly different. This has dealt a severe blow to the entire industrial chain of the industry, which may eventually affect both small and medium-sized oil and gas companies and large oil and gas enterprises. A total of 13 oil producers in North America sought creditor protection in July and August, according to statistics, and the shortfall caused by low oil prices has been exacerbated. Chesapeake, which has filed for bankruptcy protection, has $11.8 billion in debt.

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