Oil continues descent with higher rig count numbers; EP Energy, Halcon, California Resources trek down

By Colin Hanner

Chicago, July 7 – The distressed debt market reflected previous sessions on Friday, a market source said, in that “activity didn’t really pick up” on a holiday-shortened week.

The activity that was there was concentrated on the sway of oil prices on the day, with distressed exploration and production companies moving in tandem with the downward price of oil.

EP Energy Corp., Halcon Resources Corp. and California Resources Corp. were among the session’s losers.

Elsewhere, GenOn Energy Inc. was one of the day’s more actively-traded issues, Intelsat SA pared losses from Thursday’s session and several other one-off issues traded on a lackluster end to a four-day week.

Energy lower

Weekly data from Baker Hughes showed an increase in oil rigs on the week, adding seven to a total of 763, which is 422 more active rigs from this point last year.

Oil future contracts reacted to the news, with West Texas Intermediate crude oil falling $1.19, or 2.61%, to $44.33.

California Resources’ 8% notes due 2022 were down 2 points to 60½.

EP Energy’s 9 3/8% notes due 2020 were down 1½ points to 76¾.

Halcon Resources’ 6¾% notes due 2025 were down 2¼ points to 88.

Driller Noble International Holdings Ltd.’s 7¾% notes due 2024 were down “1 point and change” to 77¼, a market source said.

Northern Oil and Gas, Inc.’s 8% notes due 2020 were down 2 points to 64.

Pacific Drilling Co.’s 7¼% notes due 2017 were unchanged at 50.

On Thursday, oil gained slightly overall on the Energy Information Agency’s weekly report that U.S. crude inventories decreased by 6.3 million barrels, nearly three times higher than estimates.

Compared to West Texas Intermediate’s price at close on June 30, prices are more than 60 cents lower.

Distressed wrap

On Friday, GenOn Energy’s 7 7/8% notes due 2017 were up “almost 1 point” to 61, a market source said.

Its parent company, NextEra Energy Inc., was continually mentioned in the news cycle on Thursday and Friday following Berkshire Hathaway Inc.’s acquisition of Oncor Electric Delivery Co. LLC., which NextEra had been pursuing to acquire before it was denied by the Public Utility Commission of Texas.

Elsewhere, Intelsat Jackson Holdings SA’s 7¾% notes due 2021 were up ¼ point to 55¼.

And a trio of retailers saw some mixed movement, most notably PetSmart Inc.’s 7 3/8% notes due 2023, which were down 1/8 point to 23.

Bon-Ton Stores Inc.’s 8% notes due 2020 were down 3 points to 37½.

And Claire’s Stores Inc.’s 9% notes due 2019 were up ½ point to 51.

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