Distressed oil, gas mixed as crude hits six-year low; Peabody hires advisor; Verso falls

By Stephanie N. Rotondo

Phoenix, Aug. 13 – Crude oil prices fell to a six-year low on Thursday, but fresh economic data appeared to stem losses in the distressed oil and gas space.

“I would have expected some of the oil names to trade lower,” one trader said, adding that the mixed performance of the equities seemed to limit the distressed arena from sliding too much.

West Texas Intermediate crude oil declined $1.09, or 2.52%, to $42.21 a barrel, as new data showed domestic stockpiles were again on the rise.

However, a gain in retail sales and a decline in jobless claims seemed to appease investors.

A handful of oil and gas bonds even improved on the day, despite the lower crude price.

California Resources Corp.’s 6% notes due 2024 was one such issue. A trader called the paper up half a point at 75¼. Consol Energy Inc.’s 5 7/8% notes due 2022 were also deemed just slightly better at 73½.

Energy XXI’s 11% notes due 2020 also “rebounded a touch,” according to a trader.

Elsewhere in energy, a trader said coal producer Peabody Energy Corp. experienced “a little correction” in Thursday trading.

Another trader reported that the company had hired BofA Merrill Lynch to advise on the sale of its Australian coal assets.

Verso Paper Corp.’s 11¾% notes due 2019 came in on Thursday, though sources were not sure what had caused the drop.

© 2015 Prospect News.
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