In the parlance of oil and gas lawyers and restructuring advisers, zombies are “companies that have just enough money to pay interest on mountains of debt, but not enough to drill enough new wells to replace older ones that are drying out.” Currently about 2 dozen U.S. companies fit the definition including, SandRidge Energy, Comstock Resources and Goodrich Petroleum Co. Zombie companies are doing everything possible to cut drilling costs and using revenue to pay interest in an effort to stay alive - what some analyst’s term "slow-motion liquidation." With $50 per barrel as the average break-even point, many more companies may soon join the zombie group.
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