Midstates Petroleum up on earnings; SandRidge rises ahead of numbers; Energy XXI reports next

By Stephanie N. Rotondo

Phoenix, May 6 – Despite an overall negative tone to the markets on Wednesday, the distressed oil and gas space continued to trend toward the positive side.

Midstates Petroleum Co. Inc. got a sizable boost during the session. The company released earnings on Wednesday, showing a surprising adjusted profit.

SandRidge Energy Inc. put out its quarterly results after the market closed. Leading up to the release, the bonds were ticking upward.

However, Energy XXI’s debt was drifting lower ahead of its numbers.

The company is slated to publish the results on Thursday.

A trader said the 7½% notes due 2021 fell 2½ points to 42, though its 7¼% notes due 2019 held steady at 50.

Another trader pegged the 11% notes due 2020 around 96, which he deemed “a little lower.”

Investors were meantime pushing Seventy Seven Energy Inc.’s bonds higher, following that company’s earnings release on Tuesday.

A trader saw the 6½% notes due 2022 rising 2½ points to 65¼.

For the quarter, the Oklahoma City-based oil producer posted a net loss of $37.6 million, or 78 cents per share. That compared to a loss of $18.6 million, or 40 cents per share, the year before.

On an adjusted basis, the loss was $21.6 million, or 46 cents per share. That came in above expectations of a loss of 57 cents per share.

Revenue declined 16% to about $430 million.

Midstates’ debt gains

Midstates Petroleum’s earnings showed an adjusted profit for the first quarter.

Investors seemed pleased by that news, as the company’s debt ended with a firmer tone.

One trader said the 9¼% notes due 2021 gained 2½ points to 56½, while the 10¾% notes due 2020 rose over 3 points to 58½.

Another trader said the name was “more active,” seeing the 10¾% notes trading around the 58 mark.

For the quarter, the Tulsa, Okla.-based oil producer saw an adjusted profit of $4.9 million.

However, net loss came to $193.6 million and included nearly $175 million in accounting impairment charges.

Midstates ended its most recent quarter with liquidity of $1 billion, made up of $88 million of available borrowing capacity and $12 million in cash and equivalents.

SandRidge up ahead of numbers

After the bell, Oklahoma City-based SandRidge reported its first quarter results.

A conference call to discuss said results will be held Thursday morning.

Leading up to the release, SandRidge’s bonds were booming.

One trader said the 7½% notes due 2023 put on 1½ points, closing at 72½. Another source pegged the 7½% notes due 2021 at 74 bid, up almost a point on the day.

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.

Coal under pressure

As oil and gas names remained strong, the coal sector remained weak.

One trader said that Walter Energy Inc. was “pretty much unchanged but more active [on] speculation they will file soon.”

The company missed a coupon payment on April 15.

Additionally, the trader said that Alpha Natural Resources Inc. was “a little weaker, probably getting dragged down with concerns of Walter filing.”

At another desk, a trader saw Walter’s 8½% notes due 2021 falling a quarter-point to 7¾, while the 11% notes due 2020 declined half a point to 11.

The trader also saw Alpha Natural’s 6¼% notes due 2021 “Down almost 2 [points]” at 17¼. The 6% notes due 2019 slipped half a point to 19.

However, the trader said the 9¾% notes due 2018 rose a quarter-point to 31¼.

In Arch Coal Inc. paper, a trader said the 7¼% notes due 2020 dropped almost a point to 34½.

Another market source placed Peabody Energy Corp.’s 6½% notes due 2020 at 61¼, down 1¼ points.

© 2015 Prospect News.
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