Sat, Mar. 28, 8:25 AM
- The number of companies with the worst below-investment grade debt ratings has jumped to a two-year high of 184 firms, with the oil price rout pushing a record 25 U.S. energy producers onto this month's list at Moody’s.
- The oil-and-gas and oil services companies listed account for a record 13.6% of the total of stressed companies rated B3 - six notches into junk territory - with a negative outlook for future ratings changes or lower; historically, oil firms have averaged ~8% of the firms on the list.
- During Q1, a dozen oil companies including Energy XXI (NASDAQ:EXXI), Midstates Petroleum (NYSE:MPO) and Halcon Resources (NYSE:HK), were added.
- If oil firms’ liquidity issues do not get fixed and they keep getting downgraded, the industry likely will see more debt defaults, Moody’s analyst Julia Chursin says.
- The total of 184 financially stressed companies is up 16% Y/Y but still far short of the 290 borrowers at the peak of the financial crisis in Q1 2009.
Thu, Mar. 26, 5:49 PM
- After oil's drop from more than $100/bbl to ~$50 in just months, oil producers are using hedges as a source of income rather than just as a form of insurance to lock in minimum prices for oil, Dow Jones reports.
- Carrizo Oil & Gas (NASDAQ:CRZO), for example, has placed several hedges on ~12K bbl/day that guaranteed it at least $91/bbl on average, locking in a $166M gain which exceed its $163M in total revenue last quarter, and added new contracts guaranteeing a minimum price of $50/bbl for some of its oil this year and next as protection in case oil prices fall further.
- Continental Resources (NYSE:CLR) dropped nearly all its oil hedges when crude was still priced at ~$80 in early November, earning $433M from the move and using the cash to cover operating costs and keep its investment grade credit rating.
- Cashing in hedges is part of the survival strategy being used by Energy XXI (NASDAQ:EXXI), which booked a $377M loss in its latest quarter; it got $73M in January and February for cashing in some of this year's hedges, and put on new hedges at lower prices; similarly, Parsley Energy (NYSE:PE) says it brought in $63M in recent months by cashing in some of its hedges.
- But companies are notoriously bad at choosing when to put on and take off hedges; though many U.S. oil firms, especially smaller producers, routinely use hedges to lock in prices, many were less hedged than usual heading into the oil price plunge that started last June.
Thu, Mar. 26, 9:13 AM
Mon, Mar. 9, 11:13 AM
- Energy XXI (EXXI -0.7%) is downgraded to Hold from Buy with a $4 price target, reduced from $6, at KLR Group, which cites an increase in its interest expense assumption driven by the issuance of $1.45B of lien notes partly offset by a ~40% increase in its FY 2017 forward capital spending assumptions.
- EXXI last week increased its offering size to $1.45B from $1.25B; the Company says it will use a portion of the proceeds to repay borrowings under its revolving credit facility.
Thu, Feb. 19, 9:12 AM
Mon, Feb. 9, 6:19 AM
Sun, Feb. 8, 5:30 PM
Wed, Feb. 4, 9:13 AM
Fri, Jan. 30, 11:26 AM
- Pump prices may have dropped below $2/gal in many parts of the U.S., but investors are starting to notice losses from energy companies in their portfolios to the tune of $393B since June, according to a Bloomberg analysis.
- The losses sometimes show up in indirect ways, via investment funds, retirement accounts and bank balance sheets.
- The article cites the example of Energy XXI (NASDAQ:EXXI), whose bond offering eight months ago enjoyed so much demand that it more than doubled the size of the offering, but the debt is now trading for less than $0.50 on the dollar and its stock has declined 88%.
- EXXI’s second-largest reported shareholder is a group of funds managed by Vanguard, and the top reported owner of the bonds EXXI issued in May is Franklin Templeton; the stocks of three banks that extended a $1.5B credit line to EXXI - Zions (NASDAQ:ZION), Comerica (NYSE:CMA) and Hancock (NASDAQ:HBHC) - are down 10%-15% this month.
Thu, Jan. 29, 8:29 AM
Wed, Jan. 28, 9:14 AM
Tue, Jan. 27, 12:40 PM
Tue, Jan. 6, 12:45 PM
Sun, Jan. 4, 3:49 PM
- The following stocks were the Russell 2000's worst performers in 2014:
- KWK -93.5%. WLT -91.7%. AMZG -89.5%. PHMD -88.2%. EXXI -88%. RGDO -86.8%. REN -85.4%. HERO -84.7%. EOX -84.3%. MCP -94.3%. CVEO -84.2%. BPZ -84.1%. FWM -82.6%. MILL -82.2%. NADL -81.6%. VRNG -81.4%. CYTX -81%. SALT -80.5%. PRKR -80%. MBII -79.7%. NTLS -79.2%. COVS -78.9%. KEG -78.9%. MM 78 MPO -77%. ANR -76.6%. EXEL -76.5%. SZYM -76.3%. CONN -76.2%. ANV -75.5%. GALT -75.5%. ZQK -74.8%. ARO -74.5%. REXX -74.1%. GDP -74%. FUEL -73.8%. QRHC -73.7%. VTG -73.4%. RLOC -73%. XONE -72.2%.
Dec. 26, 2014, 4:23 PM
- Though most large-cap energy stocks closed the day with modest gains or losses, a slew of small-cap and mid-cap U.S. oil and gas plays sold off on a day that saw WTI crude once more fall below $55/barrel, and Henry Hub natural gas drop below $3/mmBtu for the first time since 2012, before bouncing a little.
- Decliners: EXXI -4.4%. SGY -4.5%. HK -4.1%. EVEP -2.3%. NFX -3.2%. SDR -3.3%. SN -5.2%. SD -5.9%. LGCY -2.2%. CHKR -3.3%.
Dec. 24, 2014, 12:44 PM
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