The sharp decline in oil and natural gas prices over the two years prior to 2016 has led to a record number of bankruptcy filings by major energy companies, including oil exploration and production companies, natural gas producers and pipeline companies. Oil traded at over $100 per barrel in 2014, but it has since plunged to below $30, before recovering to its current level of about $38 as of April 5, 2016. In fact, the pace of defaults and bankruptcies has been accelerating, with 42 companies carrying combined debt of $18 billion filing for bankruptcy protection in 2015.

Bankruptcy filings in 2016 could reach even higher levels than those in 2015. Up to 35% of all public oil companies globally could be in severe financial distress and on the verge of bankruptcy in 2016, estimates management consulting firm Deloitte. With so much focus on the oil industry in the media, it’s worth taking a look at the top five oil bankruptcies of all time.

Texaco

In 1987, Texaco Corporation was the third-largest integrated oil company, and it became at that time the largest company in U.S. history to file for bankruptcy protection under Chapter 11. Texaco had a long and storied history, dating back to 1901, when it was first established as the Texas Fuel Company. The $34.9 billion bankruptcy was a result of a long legal battle with Pennzoil over Texaco's interference with Pennzoil's planned acquisition of the Getty Oil Company. Texaco was ordered to post a $12 billion bond in order to proceed with its legal fight. Instead of posting the bond, the company filed for bankruptcy. The filing enabled Texaco to buy the time it needed to restructure its debt and financial structure. In 2000, Texaco merged with Chevron, and in 2005 it changed its name again and now operates as Chevron Corporation (NYSE: CVX).

Oleo e Gas Participacoes SA

Oleo e Gas Participacoes SA (BVMF: OGXP3.SA) is a Brazilian company, part of the oil and gas empire of billionaire Eike Batista. The company's bankruptcy in October 2013 was the largest in Latin America and was a result of disappointing output from its offshore wells. Investors lost confidence in the company, and it was unable to reach an agreement with its creditors to renegotiate $5.1 billion in debt. In 2014, creditors approved the corporate restructuring plan.

Samson Resources

Samson Resources is a privately held oil and gas driller based in Oklahoma. In 2011, Henry Kravis' company, KKR & Co., took over Samson in a $7.2 billion leveraged buyout. However, the subsequent collapse in oil and gas prices, combined with the billions in debt that KKR and other investors took on to fund the buyout, led to Samson Resources filing for Chapter 11 bankruptcy in September 2015. The company's bankruptcy was the largest to take place in 2015. Samson Resources plans to restructure its $4.2 billion debt load by swapping equity control for debt forgiveness, in a deal with a group of investors holding the company's $1 billion second-lien loan.

ATP Oil & Gas

ATP Oil & Gas (OTC: ATPAQ) comes in at number four on the top five list of oil bankruptcies. ATPAQ's bankruptcy came on the heels of the BP Deepwater Horizon disaster in the Gulf of Mexico. The company is an offshore oil producer, and when the Obama administration ordered a moratorium on deepwater operations in the Gulf in 2010, ATPAQ could not complete work on wells on its Titan production platform. ATPAQ was forced to spin off Titan and borrow $350 million. By 2012, ATPAQ was unable to meet interest payments on debt that had spiraled to $3.6 billion. The company filed for Chapter 11 bankruptcy on April 17, 2012, in order to proceed with a corporate restructuring.

Sabine Oil & Gas

Sabine Oil & Gas Corporation (OTC: SOGCQ) filed bankruptcy under Chapter 11 in July 2015, but the company has continued to fund operations with cash and revenues from its ongoing oil and natural gas activities in Texas and Louisiana. At the time of its filing, SOGCQ carried debt of $2.8 billion that it hopes to restructure. Companies filing for Chapter 11 bankruptcy may emerge as viable entities, but the creditors and bondholders typically become the new owners.

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