Today's U.S. airstrike that killed a top Iranian general and spiked Middle East tensions could provide some of the most indebted North American oil producers such as Whiting Petroleum (WLL +7.9%) and California Resources (CRC +9.5%) "a bit of a lifeline" if they can lock in hedges above $60/bbl, Bloomberg reports.
WLL's unsecured 2023 notes rose 2.75 cents to $0.875 on the dollar, their best level since August, and second-priority notes due 2022 issued by CRC soared above 50 cents for the first time since September, according to the report.
"That doesn't mean that any of these companies that were distressed are going to be suddenly rolling in cash... but it does give them a bit of a lifeline," says Bloomberg's Spencer Cutter.
Higher oil prices are unlikely to result in new issuance for capital spending or acquisitions, but companies may be able to persuade investors to give them more time to pay off their debts, such as Chesapeake Energy's (CHK +5.8%) refinancing deal that allowed it to stave off bankruptcy, Cutter says.
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