Many of you may have seen that Whiting Petroleum recently announced its bankruptcy, which is significant news to me that I consider worthy of a quick case study.
For those of you who are unfamiliar, Whiting Petroleum is one of the largest Exploration & Production (E&P) corporations in the oil sector (ConocoPhillips is the largest). E&P companies, often called “upstream oil producers”, do exactly what comes to mind when you picture oil being driven from the ground. Other sectors of the “oil economy” are midstream, which involves the transportation, storage, and marketing of oil, as well as downstream, which involves the conversion of oil-products into gasoline and jet fuel.
When the price of rises or falls, it is E&P companies that are the primary beneficiaries or adversely affected entities because they are selling the oil that they produce (whereas the midstream and downstream participants are much more reliant on the … Read the rest of this article!