Distressed bonds pare week’s gains; Whiting down as drill plan nixed; Denbury mixed

By Stephanie N. Rotondo

Seattle, Feb. 19 – The distressed debt market ended Friday with a softer tone after spending much of the week trending higher.

The softness came as the broader markets also lost momentum, driven by renewed declines in oil and a larger-than-expected rise in consumer prices that have some pondering an interest rate hike this year.

For its part, domestic crude prices declined 3.25% on the day, trading south of $30 once again.

Whiting Petroleum Corp. continued to be active, but Friday’s movements were spurred by news that the company had shelved a plan to drill 20 new wells at its Bakken and Three Forks sites.

The suspension of the drill plan was attributed to the low oil price environment.

Denbury Resources Inc. meantime traded mixed in the wake of the company’s earnings release on Thursday. The company reported a surprise loss for the fourth quarter, but did end the year with significant liquidity.

Also in the oil and gas arena, Basic Energy Services Inc.’s bonds traded up a touch after the company put out its own earnings release late Thursday.

Away from oil and gas, a trader saw Intelsat SA’s 5½% notes due 2023 falling over 1½ points to 75 3/8. Another market source saw the satellite services provider’s 6 5/8% notes due 2022 sliding nearly 2 points to 63¼.

The Luxembourg-based company is slated to release earnings on Monday.

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