FT: Leniency expected from oil creditors amid fall in prices

Dec. 05, 2014 10:38 AM ETKodiak Oil & Gas Corp (KOG)CWEI, CHRD, BBEPQ, KOG, EGC, ROANBy: Carl Surran, SA News Editor19 Comments
  • Indebted U.S. shale companies are facing financial pressure from falling oil prices, raising fears that liquidity could dry up for companies with the greatest debt burdens, but Fitch thinks they may find their lenders are inclined to go easy on them.
  • The rating agency believes that, as in the previous oil price crash of 2008-09, banks are likely to show forbearance rather than pushing many companies towards restructuring or bankruptcy.
  • Fitch identifies Kodiak Oil and Gas (KOG -2.9%), which has already accepted a takeover offer from Whiting Petroleum (WLL -2.6%), as showing the most warning signs.
  • Linn Energy (LINE -0.9%), Breitburn Energy (BBEP -2.6%) and Energy XXI (EXXI -2.8%) are among the companies that have less than half of their revolving credit facilities still unused and available, while Clayton Williams (CWEI -3.5%) had hedged less than half its production for next year, according to Fitch.

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