Banks are increasingly requiring U.S. oil and gas companies to maintain minimum levels of liquidity, an unusual step that could help reduce the risk of being exposed to companies struggling to maintain operations and repay debt.

US crude oil production in March averaged 9.127 million b/d, down from 9.133 million b/d in February and 9.648 million b/d in March 2015.

U.S. Rig Count is unchanged from last week at 404, with oil rigs down 2 to 316, gas rigs up 2 to 87, and miscellaneous rigs unchanged at 1. Canadian Rig Count is down 1 rig from last week to 43, with oil rigs down 2 to 14, gas rigs up 1 to 28, and miscellaneous rigs unchanged at 1.

The US officials gave a positive assessment of Ukraine's sourcing of gas from Europe and the ongoing reform at Naftogaz and Ukraine’s gas market. They also commended the implementation of the corporate governance reform, which was based on OECD principles for state-owned enterprises.

Crude oil production fell 7.8 percent from April 2015 to average 8.9 million barrels per day in April, the lowest output level in 20 months. Natural gas liquids (NGL) production, a co-product of natural gas production, rose from prior year. NGL production in April averaged 3.3 million barrels per day, 0.7 percent higher than last year. This was the highest April output level on record.

U.S. Rig Count is down 2 rigs from last week to 404, with oil rigs unchanged at 318, gas rigs down 2 to 85, and miscellaneous rigs unchanged at 1. Canadian Rig Count is up 1 rig from last week to 44, with oil rigs unchanged at 16, gas rigs up 1 to 27, and miscellaneous rigs unchanged at 1.

"[Oil’s recent rise] is not enough," said Dicker. "You can’t find the financing to keep the lights on at $50 oil. Most of these guys won’t be able to keep the lights on at $65 or $70 oil."

Many companies on the teetering on the brink of insolvency find themselves buried under high interest rates and lack of deployable capital due to low commodity prices. Many banks have cut oil company credit lines as part of the semi-annual review by lenders. But the combined $8.9 billion in debt between the eighteen companies still looms ever menacingly in the background.

Crude oil production in June from the seven major US shale regions is expected to fall 113,000 b/d month-over-month to 4.85 million b/d. Gas production from the regions is forecast to fall 464 MMcfd.

Oil and gas producers depend largely on bank credit lines to run their businesses. Cmpanies getting ready to restructure are working closely with their bankers before filing for bankruptcy.

As the number of failed operators mounts, the surviving companies are laying the groundwork for what they forecast will be an era of slower but steadier growth in the state at the epicenter of the U.S.’s energy boom.

Including the assumption of CPG debt, the total enterprise value of the transaction is approximately $13 billion.

The pullout comes as crude oil prices have plummeted to less than half their June 2014 levels, forcing oil companies to slash spending. For Shell and ConocoPhillips, the decision to abandon Arctic acreage was formalized just before a May 1 due date to pay the U.S. government millions of dollars in rent to keep holdings in the Chukchi Sea north of Alaska.

The rout in crude prices is snowballing into one of the biggest avalanches in the history of corporate America, with 59 oil and gas companies now bankrupt after this week's filings for creditor protection by Midstates Petroleum MPOY.PK and Ultra Petroleum UPL.NL.

US commercial crude oil inventories, excluding the Strategic Petroleum Reserve, increased 2.8 million bbl for the week ended Apr. 29 compared with the previous week. The US Energy Information Administration estimated a total of 543.4 million bbl, which is historically high for this time of year.