Oil, gas sector takes hits as oil prices hit five-year low; Cliffs, Alpha Natural bonds soften

By Stephanie N. Rotondo

Phoenix, Dec. 8 – Oil and gas names continued to be in focus in the distressed debt market on Monday as oil prices fell to a five-year low.

West Texas Intermediate crude fell to the lowest level since July 2009, dropping $2.82, or 4.28%, to $63.02 per barrel. Brent crude meantime declined $2.86, or 4.14%, to $66.21.

A trader said Halcon Resources Corp.’s 8 7/8% notes due 2021 were “the top traded bond in high yield,” with about $23 million being exchanged.

The notes lost 1½ points, ending around 72¾.

The 9¾% notes due 2020 were also active, with about $22 million trading. That paper ended off nearly a point at 73¾.

California Resources Corp.’s 6% notes due 2024 – a $2.25 billion deal that priced Sept. 11 – ended the day down over 2 points at 85 7/8, according to the trader.

Linn Energy LLC then declined at least a deuce on the day, with one trader seeing the 8 5/8% notes due 2020 at 86¾ and another pegging the 7¾% notes due 2021 at 84¼ bid.

SandRidge Energy Inc. then lost 3½ points, closing at 67½ bid.

Private independent E&P Samson Investments Co. saw its 9¾% notes due 2020 weakened a point to 53, albeit in a single trade, a trader said.

In Goodrich Petroleum Corp., the company’s 8 7/8% notes due 2019 – along with its preferred stock – were on the decline.

A bond trader said the debt finished at 56¼, down 4 points.

In the preferreds, the 10% series C cumulative preferreds (NYSE: GDPPC) lost $1.66, or 20.15%, to $6.58 and the 9.75% series D cumulative preferreds (NYSE: GDPPD) fell $1.95, or 23.49%, to $6.35.

Other oil and gas preferreds were also taking hits during Monday trading.

Vanguard Natural Resources LLC’s 7.875% series A cumulative redeemable preferred units (Nasdaq: VNRAP) ended off $1.95, or 9.68%, at $18.20.

Legacy Reserves LP’s 8% series B fixed-to-floating rate cumulative redeemable perpetual preferred units (Nasdaq: LGCYO) closed the day down $2.22, or 11.77%, to $16.64.

And, Breitburn Energy Partners LP’s 8.25% series A cumulative redeemable perpetual preferred units (Nasdaq: BBEPP) finished off $1.80, or 23.49%, at $18.77.

Commodities end weaker

Among other commodity companies, Cliffs Natural Resources Inc.’s bonds continued to get beaten down.

A trader said the 3.95% notes due 2018 declined over half a point to 69. The 6¼% notes due 2040 dropped “almost 4 points” to 56, while the 5.9% notes due 2020 lost a deuce to close around 60.

In the coal space, Alpha Natural Resources Inc.’s 6¼% notes due 2021 were seen ending down 2½ points at 39 by one trader. He also saw the 9¾% notes due 2018 fell a point to 62.

Another market source placed the 6¼% notes at 40½ bid, down a point.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.