April may be the cruelest month, as T.S. Eliot wrote, but midway through May showers have been brutal and devastating.

Bankruptcies have run rampant through E&Ps and MLPs, with Halcón Resources on May 18 becoming the latest to say it had reached—but not formalized—an agreement with its noteholders to restructure its balance sheet.

The company joins a surge of once seemingly unstoppable E&Ps to file for bankruptcy within the past week. On May 15 Breitburn Energy Partners LP (NASDAQ: BBEP) filed for bankruptcy, followed by SandRidge Energy Inc. on May 16. Adding to the mayhem, MLPs including Penn Virginia Corp. and Linn Energy’s family of companies also entered Chapter 11 protection on May 11-12.

Combined, the four companies have marched nearly $16 billion in debt into court.

Should Halcón file for bankruptcy, it would add another $2.9 billion in long-term debt to the tally. Halcón’s restructuring plan would take into Chapter 11, where it would eliminate about $1.8 billion in debt. In exchange, debtholders would receive equity in the company, which has a market capitalization of about $126 million.

Bankruptcies are becoming more pronounced in their ability to wipe out investments. In 2015, 42 companies with secured and unsecured debts of $17.2 billion filed for Chapter 11 bankruptcy. In contrast, since May alone, eight companies have filed for bankruptcy with balance sheets swamped by $17.7 billion in debt.

“Commodity pressures drove the number of U.S. non-financial corporate defaults in the first quarter to 23 from 16 in the fourth quarter, the most since the third quarter of 2009,” Moody’s Investors Service said May 3.

Oil & gas led all defaults with 11.

“Ultimately it’s just too much debt to be able to be carried by companies,” said Patrick Hughes, a partner at Haynes and Boone LLP. E&Ps “were borrowing at rates that required $100 oil to make this work.”

The recent spike in bankruptcies may be the result of extended negotiations during the past six to 12 months between different classes of debtholders, Hughes said.

Without enough backing for a restructuring plan, bankruptcies are being filed on lenders “that won’t get with the program,” he said.

Junior lienholders are recognizing that the most beneficial way for them to participate in achieving some value recovery “in the long haul is to convert that debt to equity in a process that allows them to become long-term investors,” he said.

While hitting the legal pause button on creditors has allowed some companies to recover, the price paid at the end of a bankruptcy can mean the end of the company. Bankrupt Alpha Natural Resources, for instance, sold its prime Marcellus and Utica assets on May 16 in central Greene County, Pa., for $339.5 million.

Dead Cat Bounce?

Companies are also facing month after month of stagnating oil and gas prices.

Breitburn’s leadership sensed a long downturn, planned and still did not have enough runway to survive. In April 2015, the company closed a $1 billion strategic investment from EIG Global Energy Partners.

Hal Washburn, Breitburn CEO, said the prolonged decline in commodity prices that began in 2014 “has placed significant financial stress on today’s oil and gas industry. Our long-lived, low-decline portfolio of diverse assets continues performing in line with our expectations, but the current outlook for commodity prices makes our existing debt burden unsustainable.”

Liquidity is now so important, especially in cases of near bankruptcy, that E&Ps are beginning to take advantage of their borrowing base tabs, effectively maxing out their credit with cash advances.

The tactic is “not dissimilar to what Ford Motor Co. did back when trying to position itself for the extreme downturn that occurred in ’08-‘09 in the automobile industry,” Hughes said.

But the price outlook remains bleak, which is too much of a hurdle to overcome.

In the 2008-2009 downturn, oil and gas companies saw a V-shaped recovery in prices that allowed them to project a better value and work out payment plans.

“The hope last year was that 2015 would be like 2009, with a rapid recovery in prices,” Hughes said.

A May report by the Congressional Budget Office (CBO) offers no such hope. CBO projects that spot prices will rise from $40 per barrel in second-quarter 2016 to $46 per barrel in second-quarter 2017 and then by between $3 per barrel and $5 per barrel per year through 2021.

“Absent a major supply shock, futures prices are unlikely to remain outside a range of $35 per barrel to $70 per barrel (in 2014 dollars) for a sustained period over the next five years,” CBO said.

While the WTI price was about $48 per barrel on May 18, the response may be due to geopolitical events, such as raging fires in Canada, outages in Nigeria and work slowdowns in the UAE and Kuwait.

“There’s a real uncertainty as to whether the current price environment is sustainable or a result of current problems in the supply side that have only temporarily allowed a closer match between supply and demand,” Hughes said.

In the current scenario, price projections appear to be flat, flat for a long time or “we’re even in the midst of a dead cat bounce,” Hughes said, referring to a temporary recovery caused by speculators.

The Past Again

While most companies cite weakened commodity prices for their woes, the side effect is that borrowing bases have shriveled.

In the first quarter, regulated banks made many redeterminations under regulatory guidelines.

Companies themselves have also written off billions of dollars in value.

As of March 31, Breitburn had consolidated reported assets of about $4.71 billion and liabilities of $3.41 billion. The company’s consolidated net loss after taxes was $2.6 billion for fiscal 2015 and a consolidated net loss of $115 million in first-quarter 2016.

In 2014, the company had $7.6 billion in assets and more—$3.9 billion—in liabilities.

Asset impairments have gradually torn down the company, which faces a redetermination of its borrowing base in May.

Other companies have been worn out by the flooded oil and gas marketplace.

Chaparral Energy Inc. entered bankruptcy protection on May 9 with $5.96 billion in secured and unsecured debt. Its plan is to leave the courts with its bondholder debt reduced by $1.2 billion.

“The dramatic decrease in oil and natural gas prices over the last two years has presented numerous challenges for the industry as a whole,” Chaparral Energy CEO Mark Fischer said.

Chaparral’s cash flow from operations was $279.1 million in October 2014, just before the downturn. But the company’s cash flow for investments and financing created a $28.9 million deficit when oil was roughly $100 per barrel.

“Chaparral continues to believe in the outstanding potential of our employees and our Midcontinent assets and EOR programs,” Fischer said. “The continued depressed price environment, however, coupled with our existing debt levels have severely limited the company’s overall operational ability.”

Similarly, Penn Virginia dug itself a hole in third-quarter 2014. The company generated operating cash flows of $300.7 million but washed out by spending $545 million for property and equipment.

Darren Barbee can be reached at dbarbee@hartenergy.com.