BOOM TO BUST:
Oil’s Wild Ride
BY BOB MARONEY, PRESIDENT, GORDON BROTHERS GROUP COMMERCIAL & INDUSTRIAL DIVISION
In the past 12 months, the energy sector has resembled a roller coaster ide as the price of oil has once
again experienced wild cyclical swings.
Starting north of $100 a barrel for West
Texas Intermediate (WTI) in August
2014, oil prices spiraled downward to
below $50 a barrel by February 2015
before settling in around $60 per barrel
during May and June. That brief period
of price stability lasted until the Greek
referendum vote injected uncertainty
into the European economic markets
and sent WTI into the low $50s again
in early July. Subsequently, oil dropped
into the low $40 per barrel range
as news out of China continued to
impact global oil prices (Figure 1).
Amid all of this market turmoil, several
energy-related deals unfolded, including
the bankruptcy of Green Field Energy
Services, which led to the disposition
of hydraulic fracturing equipment, the
largest such disposition in U.S. history.
The Green Field disposition was a
12-month orderly liquidation of assets
valued at $250 million that reflected the
impact on oilfield equipment values,
as prices for a barrel of oil fell by more
than 50 percent over the period.