Whiting Petroleum Corporation's well has run dry, as the Denver-based company became the first big independent oil producer in the U.S. to succumb in large part due to the coronavirus pandemic.
The company had been due to repay $262m on a convertible bond on Apr. 1, 2020 but instead filed for Chapter 11 bankruptcy protection in the state of Texas. CreditRiskMonitor subscribers with Whiting Petroleum in their portfolio would have been able to see that the company's FRISK® score had been sitting at an alarming "1" since the beginning of 2020:
The adverse economic effects of COVID-19 and the ongoing Russia-Saudi Arabia oil price war are combining to make the oil and gas industry - and the energy sector as a whole - as volatile as it has been in many years. This Bankruptcy Case Study plainly reveals why now is the perfect time to schedule a demo with CreditRiskMonitor and stay ahead of bankruptcy risk in your portfolio.
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Our FRISK® score model incorporates four powerful risk inputs:
- “Merton”-type model of stock market capitalization and volatility
- Financial ratios, including those used in the Altman Z”-Score Model
- Bond agency ratings from Fitch, Moody's, and DBRS Morningstar
- Website click pattern data from CreditRiskMonitor® subscribers, representing key credit decision-makers at nearly 40% of current Fortune 1000 companies plus thousands of other large companies worldwide
Since the start of 2017, the FRISK® score’s rate of success in capturing public company bankruptcy is 96%. In any given year, you can count on one hand the times we miss – and in those outlier cases, the circumstances deal with unusual, unforeseen events such as natural disasters and CEO fraud.
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About Bankruptcy Case Studies
CreditRiskMonitor® Bankruptcy Case Studies provide post-filing analyses of public company bankruptcies. Our case studies educate subscribers about methods they can apply to assess bankruptcy risk using our proprietary FRISK® score, robust financial database, and timely news alerts.
In nearly every case, a low FRISK® score gave our subscribers early warning of financial distress within a one-year time horizon. Our proprietary FRISK® score predicts bankruptcy risk at public companies with 96% accuracy. The score is formulated by a number of indicators including stock market capitalization and volatility, financial ratios, bond agency ratings from Moody’s, Fitch and DBRS, and crowdsourced behavioral data from a subscriber group that includes nearly 40% of the Fortune 1000 and thousands more worldwide.
Whether you are new to credit analysis or have decades of experience under your belt, CreditRiskMonitor® Bankruptcy Case Studies offer unique insights into the business and financial decline that precedes bankruptcy.