Operators at Risk | Russell T. Rudy Energy LLC
“Rigzone” reports a sharp increase in the number of companies on the B3 Negative List published by Moody’s Investor Service. The list includes those companies that Moody’s considers speculative and high-risk for the long term. The number of companies on the list has increased to 223 over the last three months. This is an 8% rise and, in and of itself, is not good news.
However, what is alarming is that 19 of the 41 companies (46%) added to the list over the last three months, are from the energy sector. Low commodity prices and limited hope of short term recovery have clearly taken their toll on the prospects for exploration, production and service companies. Historically, oil and gas companies have only been less than 9% of the companies on the list, but now there are 53 companies, or 24% of the total of 223, from the energy sector.
While disturbing, this is not unprecedented at the macro level. The total number of distressed companies on the list was 220 back in 2010, and the worst ever was in April of 2009 when the count was 291. Nevertheless, this is up significantly from the low of 146 in March 2013. While the current overall total is not good, it is even worse for our industry.
To read the article in its entirety, please go to http://www.rigzone.com/news/article.asp?hpf=1&a_id=141255&utm .
