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As many as 175 E&P firms may be vulnerable to bankruptcy as 18 months of low oil prices continues to take a toll on the energy sector, according to a new report by Deloitte.

The report found that nearly 35 percent of pure-play E&Ps listed worldwide, or about 175 companies, are at a “high risk” for insolvency.

Deloitte said that 50 of the firms studied are in a “precarious” financial position due to negative equity or a leverage ratio of above 100, with shares in some of those firms now trading below the $5 mark.

“The probability of these companies slipping into bankruptcy is high in 2016, unless oil prices recover sharply or a large part of their debt is converted into equity or big investors infuse liquidity into these companies,” Deloitte said.

The report added that the “situation is almost equally alarming for about 160 E&P companies, which are less leveraged but cash-flow constrained.”

Thirty-five U.S. E&P firms with a cumulative debt of under $18 billion filed for bankruptcy protection from July 2014 to December 2015.

Although that number is small compared to the 62 firms that filed during the 2008 to 2009 downturn, Deloitte said an increase in filings during the second half of 2015 and lower oil prices could signal a coming wave of bankruptcies.

“Greater access to finance/capital, protection due to hedges at favorable prices, focus on costs after natural gas prices slumped in 2012, and lower capex commitment per shale well have helped E&P companies withstand today’s weak environment, at least until now,” the report said.

As oil prices continue to hover near multi-year lows, those firms that have already sought bankruptcy protection may also find it more difficult to exit restructuring.

While more than 80 percent of U.S. E&P firms that have filed for bankruptcy since July 2014 are still operating under Chapter 11 protection, Deloitte said the majority of those restructuring plans were approved when oil prices were around $55 to $60 per barrel.

With oil prices holding near $30 per barrel and favorably priced hedges expiring, those companies may find it difficult to “meet lenders’ earlier stipulations,” the report said.

Deloitte expects that low prices coupled with expiring hedges will increase “the probability of US E&P company bankruptcies surpassing the Great Recession levels in 2016.”

Tightening credit lines are also expected to put a strain on at-risk firms and has pushed the debt to EBITDA ratio of a “large section of US oil and gas companies” past the typical threshold of six, the report said.

Deloitte said that with a price recovery now expected no earlier than late 2016 and a “looming capital crunch and heightened cash flow volatility” this year is shaping up to be a “period of tough, new financial choices for the industry.”

“Even after 18 months of falling oil prices, pessimism has not bottomed out in the oil and gas industry,” the report said.