Energy XXI declines after oil rig fire; Magnum Hunter ends weaker; Ocwen under pressure

By Stephanie N. Rotondo

Phoenix, Jan. 23 – It was again a firm day in the distressed debt realm on Friday, but there were a few names that were driven lower following news.

Energy XXI Gulf Coast Inc. saw its bonds decline rather heavily after it was reported that one of its oil rigs in the Gulf of Mexico had caught fire.

Meanwhile, Magnum Hunter Resources Corp. held an investor call Friday to discuss how the current trend in oil prices will impact its bottom line. By the end of the day, the company’s bonds were weaker.

The moves in both of those names came as oil prices gyrated throughout the session – due at least in part to the death of Saudi King Abdullah.

West Texas Intermediate crude, however, ultimately ended softer, losing 88 cents, or 1.9%, to $45.43 per barrel. Brent crude rose 16 cents to $48.68.

Abdullah was immediately succeeded by Salman Bin Abdulaziz Al Saud. As the new king took his throne, Prince Alwaleed Bin Talal indicated that Salman would maintain his predecessor’s policies – i.e. the oil-producing nation and OPEC member would not cut its output in the face of lower prices.

“If we reduce our production some other countries will fill that gap,” Alwaleed said in an interview with Bloomberg on Friday. Though the country is not thrilled with pricing at current levels, “it’s something you have to face head on without hesitation.”

Alwaleed also speculated that the days of oil prices over $100 were a thing of the past.

Away from oil and gas names, Ocwen Financial Corp. took a fall as one of the mortgage servicer’s subsidiaries was served with a default notice.

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