Fitch notes increase in energy-default rate

Recent actions of two exploration and production companies have pushed the trailing 12-month energy default rate among issuers of high-yield bonds tracked by Fitch Ratings to 2.6%, well above the long-term average of 1.9%.

With the Chapter 11 filing by Sabine Oil & Gas Corp. on July 15 and default via a distressed debt exchange by Lightstream Resources Ltd. on July 2, the rate for the E&P subsector increased to 5.1% from 3.7%, according to Fitch.

“Significant decreases in oil and gas market prices have impaired many E&P companies’ ability to pay interest and principal and led to some defaults,” Fitch noted.

Sabine and Lightstream had borrowed heavily to fund drilling programs.

“Other significant E&P defaults this year include Midstate Petroleum Co., Connacher Oil & Gas Ltd., and Quicksilver Resources Inc.,” Fitch said.

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


Logistics Risk Management in the Transformer Industry

Transformers often are shipped thousands of miles, involving multiple handoffs,and more than a do...

Secrets of Barco UniSee Mount Revealed

Last year Barco introduced UniSee, a revolutionary large-scale visualization platform designed to...

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...