Fitch: Ratings outlook for US oil & gas revised to negative on lower prices

Fitch Ratings has revised its 2016 rating outlook for the US oil & gas industry to Negative from Stable, reflecting the impact of lower oil and gas prices, and Fitch's downward revision of its corporate oil & gas price deck earlier this month. These factors are likely to increase the number of negative ratings actions seen across the sector.

As of Jan. 24, 2015, approximately 29% of companies in Fitch's US oil & gas portfolio had Negative outlooks. Low prices hit high yield oil & gas issuers hard last year, and they remain under considerable stress in this downturn. Single “B”-rated companies in particular face a variety of challenges, including a higher cost base, declining hedge coverage, lack of financeable assets, and limited market access.

The credit impact of lower oil & gas prices is beginning to ripple out across the investment grade energy space. While most investment grade names have decent liquidity, cost positions, CAPEX flexibility, and capital markets access, the current environment has pressured credit metrics enough to put downward pressure on ratings. Investment-grade exploration and production (E&P) companies that are currently on Negative outlook include ConocoPhillips, Hess, and Southwestern Energy Co.

Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now

Whitepapers

The Time is Right for Optimum Reliability: Capital-Intensive Industries and Asset Performance Management

Imagine a plant that is no longer at risk of a random shutdown. Imagine not worrying about losing...

Going Digital: The New Normal in Oil & Gas

In this whitepaper you will learn how Keystone Engineering, ONGC, and Saipem are using software t...

Maximizing Operational Excellence

In a recent survey conducted by PennEnergy Research, 70% of surveyed energy industry professional...

Leveraging the Power of Information in the Energy Industry

Information Governance is about more than compliance. It’s about using your information to drive ...