SandRidge gives up recent gains; Energy XXI comes in; Walter lower as coupon payment made

By Stephanie N. Rotondo

Phoenix, May 8 – The distressed debt market ended the week with a positive tone, but the day’s strength did not benefit everyone.

SandRidge Energy Inc. and Energy XXI – both of which had earnings out late Wednesday – saw their bonds in retreat during the session. SandRidge paper had previously been climbing higher, while Energy XXI was mostly steady.

In addition to seeing a 36% gain in total production for the quarter, SandRidge reported adjusted EBITDA of $182 million, up from $169 million the year before. Adjusted earnings came to $2.3 million, versus $29.5 million the year before.

Still, total net loss surged to over $1 billion. That compared to a loss of $136.34 million the year before.

For the quarter, Energy XXI posted a net loss of $587.2 million, or $6.22 per share. On an adjusted basis, the loss was $102.3 million, or $1.08 per share.

Also weaker was Walter Energy Inc., though a trader noted that there was a good reason for softness in the coal producer’s debt. The company said Thursday that it would in fact make a coupon payment that came due April 15. As such, the bonds – which had previously been trading flat, or without accrued interest – began trading with interest once again, pushing the paper lower.

Advanced Micro Devices Inc. was meantime continuing to move upward. The chipmaker’s debt began to trade up around midweek after the company laid out a new profitability strategy at an analyst day conference.

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