Only CHK, GST, UPL face potential credit issues before 2018, analyst says
- A new report from Sterne Agee CRT analyst Tim Rezvan suggests the situation for oil and gas E&P stocks is not as bad as the market fears for many companies.
- After studying liquidity positions of the E&P names under the firm's coverage, Rezvan concludes that only Chesapeake Energy (CHK +4%), Gastar Exploration (GST +13.2%) and Ultra Petroleum (UPL +25.7%) face potential credit issues prior to 2018.
- Conversely, Rezvan says Oasis Petroleum (OAS +8.5%) and Whiting Petroleum (WLL +11.3%) maintain strong liquidity despite sharp equity underperformance and can withstand the reduction in credit facilities expected this spring from lending banks feeling stress in their energy loan portfolios.
- The firm has Buy ratings on OAS and WLL, and Neutral ratings on CHK, GST and UPL.