The 21st century version of the American gold rush is coming to a swift end.
A shakeout is sweeping through the U.S. oil and gas business, putting small-time petroleum prospectors who got rich off of shale energy out of business as rock-bottom oil prices reshape the sector despite the commodity's slight uptick in recent weeks.
The pain low oil prices have sparked has spread into other corners of the energy industry. This week, coal miner Peabody Energy warned that it may have to file for bankruptcy protection and SunEdison, a developer, installer and operator of alternative energy plants said it discovered problems in its accounting processes, the latest in a string of troubles for the company.
At least 48 North American oil and gas companies — pummeled as they pay for land rights that they can't make money on because of low oil prices — have filed for bankruptcy since the start of 2015, according to a February report by law firm Haynes and Boone. That’s up from eight oil and gas bankruptcies in 2014, according to New Generation Research.
The oil and gas companies that plumbed the new reserves are becoming a victim of their own success as fossil fuels flood the market and broader, global factors wreck the conventional wisdom that insatiable demand will prop up prices. Awash in supply, oil prices are down more than 60% over the last two years, having briefly plunged below $30 per barrel earlier this year.