The average upstream probability of default (PD) for the top ten companies in the Energy Credit Risk League Table below decreased to 30.75% in March 2015 from 49.10% in December 2014. Additionally, as of December 31, 2014, only two of the top ten upstream companies were outside the U.S. and Canada. Therefore, nonconventional North American upstream companies were feeling significant pain.
In the below league table,upstream companies with high risk have a much larger global diversification with half operating outside the U.S. and Canada--perhaps reflecting either slightly more optimistic views on U.S. and Canadian companies or a more even share of risk distributed across the globe.
Global Energy Credit Risk League Table, As of March 31, 2015
Given the risk and uncertainty in the current energy markets, it makes a lot of sense to keep an eye on the names in the league table and closely monitor your exposures to them. After all, in the past year, 2 bankruptcies in the energy sector had been predicted by previous versions of the credit risk league table. Read our blog post “Where Will We Find The Next Energy Bankruptcies” to learn more.