|Bid||4.8600 x 4000|
|Ask||4.8700 x 3000|
|Day's Range||4.7600 - 5.4000|
|52 Week Range||3.8000 - 38.1200|
|Beta (5Y Monthly)||1.87|
|PE Ratio (TTM)||N/A|
|Earnings Date||Apr 28, 2020 - May 03, 2020|
|Forward Dividend & Yield||0.10 (1.70%)|
|Ex-Dividend Date||Apr 20, 2020|
|1y Target Est||15.66|
An American City Business Journals analysis of public stock prices found that Houston companies have seen some of the largest stock value declines in the nation in recent weeks.
Apache (APA) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.
Apache Corp. said Friday that the downgrade of its credit by Standard & Poor's late Thursday, which cut the rating by two notches into "junk" territory, is not expected to have a material impact on its financial position, liquidity or business strategy. The oil and gas exploration company said it will have ot post letters of credit of about $650 million related to asset retirement obiligations in the U.K. North Sea. "Apache has ample liquidity and a very manageable bond maturity profile for the next five years," said Chief Financial Officer Stephen Riney. Late Thursday, S&P Global Ratings cut Apache's credit rating to BB+ from BBB, with a negative outlook, saying the recent collapse in oil prices will negatively affect profitability and cash flows. The stock, which fell 1.0% in premarket trading, has plunged 78.0% over the past three months, while crude oil futures has tumbled 63.4% and the S&P 500 has declined 18.8%.
The oil price crash has seen multiple oil and gas producers have their bonds pushed into distressed territory, with the credit agencies downgrading them to junk ratings
Apache Corporation (NYSE, Nasdaq: APA) today provided additional information related to the strength of its liquidity position and capital structure in response to Standard and Poor’s decision yesterday to lower Apache’s credit rating. On March 26, 2020, Standard & Poor’s reduced Apache’s credit rating from BBB to BB+. While credit ratings serve a valuable purpose and are important to Apache, the company does not expect this ratings change will have any other material impact on its financial position, liquidity or business strategy.
Apache (APA) saw a big move last session, as its shares jumped more than 5% on the day, amid huge volumes.
Suncor Energy (SU) trimmed its 2020 capital spending guidance by nearly 26% due to an unexpected drop in oil prices and bleak global demand on account of the coronavirus outbreak.
The last time the S&P 500’s total dividends declined from the previous year was in the aftermath of the financial crisis. Expect that to happen this year.
Will the new coronavirus cause a recession in US in the next 6 months? On February 27th, we put the probability at 75% and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to […]
Amid crashing oil prices, oil firms are rushing to cut budgets and exposure to the most prolific shale basin in the United States, the Permian
Houston-based Apache Corp. is planning a round of layoffs in Midland, Texas. The oil and gas exploration and production company filed a Worker Adjustment and Retraining Notification Act letter with the state saying that Apache plans to conduct a “mass layoff” at its 303 Veterans Airpark Lane facility in Midland. About 85 employees are affected, with the separation process beginning March 18, according to the WARN letter, which the Texas Workforce Commission released March 20.
Rating Action: Moody's reviews Apache's Baa3 rating for downgrade. Global Credit Research- 20 Mar 2020. New York, March 20, 2020-- Moody's Investors Service placed Apache Corporation's Baa3 senior unsecured ...
What a difference a month has made for Diamondback Energy (NASDAQ:FANG) stock. The company had been among the best-performing and best-run shale drillers. But now it is in serious financial trouble: driven massive returns since its 2012 initial public offering, it has since touched an all-time low on Wednesday.Source: Shutterstock The problem for FANG stock, however, is that the selloff actually makes sense. That claim seems bizarre given that the stock has declined 78% in just a month. It's not bizarre in the context of the industry and the balance sheet, however.More simply, it's not bizarre because the world is different for Diamondback than it was just a month ago. This is an industry that has a history of "boom and bust" cycles. The bust has arrived, and it's too early to be forecasting another boom for the stock.InvestorPlace - Stock Market News, Stock Advice & Trading Tips FANG Stock Rallies After Q4 2019 ResultsIt's incredible to review Diamondback's fourth quarter 2019 results, released after the close on Feb. 18, with the benefit of hindsight. The quarter was well-received -- shares rallied more than 6% the following day -- and with good reason.Average production rose 5% quarter over quarter, and 50% year over year. Diamondback doubled its dividend to $1.50 annualized, offering (at the time) a 2% yield. * 10 Stocks to Invest In for a Post-Coronavirus Whipsaw In the release, Diamondback noted that it had raised $3 billion in debt with an investment-grade rating. And it spent another $200 million in the quarter to repurchase stock.In the "old" shale environment, that all was good news. But in the light of an "all out price war" instituted by Saudi Arabia earlier this month, the quarter looks very different. Looking to 2020The ramp in production, for instance, is going to reverse in a hurry. Diamondback has given a "minimum one-month break" for all of its completion crews. The rig count by the end of the year will drop by more than half. Production will steadily decline over the course of the year. Diamondback is trying now to save some of the capital spending it made just months ago.Diamondback has said it will protect its now-doubled dividend, but a cut may be on the way. The $200 million in share repurchases look disastrous: Diamondback paid an average of $82 per share for a stock now traded at $17.The investment-grade balance sheet still holds -- for now. But a cut to "junk" by ratings agencies at this point is just a formality. Diamondback's 5.375% senior notes, due 2025, are priced at 79 cents on the dollar. They yield over 10% to maturity.This simply is a different company. And it's not because Diamondback management was foolish, or dishonest, in February. It's not because investors weren't paying attention. It's because the Saudis moved, and crude oil, at the West Texas Intermediate spot price, went from $53 in February to $31 right now.At that price, much of Diamondback's acreage isn't economical, which is why production is being slashed. Its cash flow is going to plummet, which is why its share price has plunged.To be sure, there are reasonable debates as to whether FANG stock should be at $27 instead of $17 -- or $7 instead of $17. But from a broad standpoint, the decline in FANG stock is not a panic-driven selloff. The outlook is substantially worse than it was a month ago, and so the same should be true of the share price. Yes, Bankruptcy Is a RiskAnd the worst-case scenario is in play. Diamondback generated $3.1 billion in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) in 2019. That figure is going to be slashed going forward. A 40% reduction in prices and much lower production both suggest most of those profits are going to disappear.Yet Diamondback has nearly $5.4 billion in debt. That in turn suggests that debt-to-EBITDA probably clears 6x (at least) looking to 2020 numbers.That's a dangerous multiple. It's actually about in line with where Chesapeake Energy (NYSE:CHK) sat last year as its own bankruptcy fears began to accelerate.To be clear, a single multiple doesn't mean Diamondback is going into bankruptcy. It almost certainly won't do so any time soon, given that most of its debt doesn't mature until 2025. The company has plenty of time to respond to the new environment, and to hope for higher prices to return.Still, as long as bonds are yielding 10%, it's important to remember that the worst-case scenario still exists. FANG stock has dropped by 80%, but if everything goes wrong it could fall another 100%. The Case for FANG StockAfter all that gloom and doom, it's important to point out that there is a bull case for FANG stock from here. The fact that crude has plunged doesn't negate the fact that the company has proven to be one of the better-run shale operators out there.In fact, Diamondback sailed nicely through the first shale bust in the middle of the last decade. The drop in WTI to $30 is a different animal, admittedly, but I'd rather bet on oil prices rebounding with FANG than with, say, Occidental Petroleum (NYSE:OXY), whose stock is reeling from last year's disastrous acquisition of Anadarko Petroleum.But Diamondback needs crude to rally for its stock to rally. As long as WTI stays below $35, I'm skeptical there's enough earnings power to support much more than the current $3 billion market capitalization. And there are other options out there. ConocoPhillips (NYSE:COP) and Apache (NYSE:APA) both are intriguing plays on a rebound.To be sure, an investor can create a smart thesis for choosing FANG stock as the best play on a rebound in crude. And going forward, there is hope. The balance sheet is in decent shape by sector standards. Management has been solid. Other drillers are going to cut back their own production -- and many will fail. Over time, that may allow for prices to recover.The point, however, is that investors have to build a thesis for Diamondback stock looking forward -- not simply buy because the stock is down so far. After all, many of those investors might have made a similar case at $30, when FANG already was more than 70% off 2019 highs. The stock has fallen since then. Don't forget that it could fall further still.After spending time at a retail brokerage, Vince Martin has covered the financial industry for close to a decade for InvestorPlace.com and other outlets. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * America's Richest ZIP Code Holds Wealth Gap Secret * 10 of the Best Long-Term Stocks to Buy in a Bear Market * 7 "Perfect 10" Healthcare Stocks to Buy Now * Where the FANG Stocks Sit in This Wild Market The post Diamondback Energy Stock Isn't Worth Chasing Here appeared first on InvestorPlace.
Concho Resources' (CXO) success in sustaining a solid financial base in 2019 with $2.1 billion of liquidity and no near-term debt maturities is pleasing to investors' ears.
In order to cope with the downward spiral in oil prices, the likes of Occidental Petroleum (OXY) and Apache (APA) slashed their dividend payouts.
Retailers were hit especially hard after extraordinary action by the Federal Reserve did little to calm investors.
(Bloomberg) -- The latest crash in oil prices is threatening to push $140 billion of investment-grade energy debt over the edge into junk.Despite the modest recovery after 2016, oil prices have been capped by plentiful global supplies, and at the same time the U.S. shale sector has exhausted the patience of many equity investors with consistently poor returns. Now, the industry has been blindsided by the double whammy of a supply shock from the coronavirus and an oil price war, and President Donald Trump’s efforts to prop up prices is unlikely to offset more expected supply from major producers.That’s left exploration and production companies in a weaker position coming into the latest crisis, with WTI crude dropping below $30 a barrel. Those including Occidental Petroleum Corp., as well as Apache Corp. and Marathon Oil Corp. are cutting spending wherever possible, but bond traders seem to have already made up their minds -- some of these companies’ debt, and that of others, is trading around 70 cents on the dollar, a far cry from near par where most traded just a few weeks ago.“When you have these investment-grade companies trading in the 60s, 70s, and 80s, that tells you that the market certainly doesn’t look at them as investment grade,” said James Spicer, a high-yield analyst at TD Securities focused on energy. “It looks at them as distressed names that have real default risk.”It may be too late for oil producers to refinance their way out of this one. Capital markets have been mostly shut for weeks as corporate debt traders price in a greater chance of recession, only opening up in small windows for the highest-quality borrowers in safe-haven sectors like utilities. If companies can’t service their debt, the possibility of downgrades pales in comparison to the threat of default.Read more: We’re About to Find Out If Anyone Will Lend to Distressed EnergyFor investment-grade borrowers, they’re still trying to avoid downgrades to high yield, which would make them so-called fallen angels, but strategists are betting against it. UBS Group AG boosted its fallen angel forecast by $50 billion to a high of $140 billion, largely due to the stress in energy. That number could represent just North American energy companies alone crossing to high yield, while a prolonged downturn could affect an additional $320 billion of BBB rated midstream debt, Bloomberg Intelligence analyst Spencer Cutter said in a report Wednesday.Much of that could come from Occidental, which slashed its dividend last week for the first time in 30 years to conserve cash, and would be the largest issuer in the Bloomberg Barclays high-yield index if cut. Apache, which also reduced its payout, is another, as well as Marathon Oil, Continental Resources Inc., Cimarex Energy Co., Noble Energy Inc. and Hess Corp., according to Morgan Stanley. Unlike 2016, the risks in energy today are not limited to high-yield companies alone, analysts led by Srikanth Sankaran said in a report.Hess has 80% of its 2020 production hedged, no meaningful debt maturities until 2027 and more than $5 billion of liquidity to protect its ratings, spokeswoman Lorrie Hecker said in an email. Apache also pointed to its $4 billion of liquidity and “considerable flexibility” to manage upcoming debt maturities. It doesn’t have any debt due this year.A spokeswoman for Occidental declined to comment, while representatives for Marathon Oil, Continental Resources, Cimarex Energy and Noble Energy didn’t respond to requests for comment.Buying TimeThe exploration and production sector makes up the biggest chunk of riskiest high-grade companies and would be the first on the chopping block when credit raters start downgrading, according to CreditSights. Cost-cutting measures like those announced last week by Occidental and Apache may help companies buy more time, but the big question is whether that will be enough to keep bond graders at bay, according to Erin Lyons, U.S. credit strategist at CreditSights.“Given the underlying price environment especially in energy, there just might not be much else they can do apart from cutting shareholders’ returns,” she said.Read more: U.S. Shale Drillers Cut Spending and Curb Drilling on Oil’s DropMoody’s Investors Service is expecting more oil and gas companies to reduce capital spending, and potentially cut or even suspend payouts to shareholders as cash flows dwindle and access to capital markets becomes limited. S&P Global Ratings said it will review all investment-grade and high-yield E&P companies as it now expects WTI crude to end the year at $35 instead of $55.S&P on Monday downgraded Exxon Mobil Corp.’s credit rating for the first time since the 2016 oil-price crash. Its 3.095% bonds maturing 2049 were the biggest decliners in the high-grade bond market, according to Trace data. Meanwhile, Energy Transfer’s 5% bonds due 2050 dropped about 1.8 cents on the dollar to about 79.7 cents.Higher-quality names like Diamondback Energy Inc., Parsley Energy Inc. and WPX Energy Inc. are likely to trade back up once the dust settles, said TD’s Spicer. But for the riskier ones like Occidental, Cimarex and Continental Resources, it may be too late to stave off downgrades to junk, especially if oil prices don’t rebound anytime soon, Spicer said.“If this situation persists for any period of time, and it seems like it will, I think all of these names will come into high yield,” he said.(Updates oil prices in third paragraph, adds Exxon Mobil and Energy Transfer bond price details in 13th)\--With assistance from Rachel Adams-Heard and Kevin Crowley.To contact the reporters on this story: Caleb Mutua in New York at email@example.com;Allison McNeely in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Nikolaj Gammeltoft at email@example.com, Molly Smith, Simon CaseyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
EOG Resources Inc, Whiting Petroleum Corp and EQT Corp cut drilling activity and budgets on Monday, becoming the latest North American shale producers to be hit by lower oil prices, which fell below $30. Oil producers are trying to shore up cash as demand dwindles because of the global coronavirus outbreak and the double-whammy of a price war that threatens shale companies, which had budgeted for oil prices at $55 per barrel to $65 per barrel in 2020.
(Bloomberg Opinion) -- The first week of March felt like a monumental one in the $100 trillion global bond market. Traders were staring at chaos in seemingly every corner of the world because of the coronavirus outbreak and began bracing themselves for some turbulence.It turns out that was just the warm-up act for this past week.Just about all the measures of bond-market mayhem that I flagged six days ago have only become worse as stocks plunged into a bear market and investors slammed the panic button across asset classes. Liquidity is everyone’s top priority, and it’s as scarce as ever, even in U.S. Treasuries, supposedly the world’s deepest and most liquid bond market. Credit spreads and the cost to insure against default have exploded on investment-grade and high-yield corporate debt alike. Ten-year U.S. municipal bond yields rose by 45 basis points in a single day, the most ever. Across the Atlantic, Italy’s 10-year yield jumped by as much as 72 basis points on the same day for entirely different reasons.Last week I called the bond market sentiment “creeping doom-and-gloom.” That’s no longer the case: The doom and gloom has arrived. Here are 10 charts that show how investors have come to terms with the prospect that the pandemic will quite possibly tip the global economy into a recession and cause companies worldwide to face credit downgrades at best or outright defaults at worst.The journey across bond markets has to begin again with 30-year Treasuries:Bond traders in the U.S. woke up Monday to see the entire Treasury yield curve trading below 1% for the first time in history. The 30-year yield dropped to as low as 0.6987%, staging the biggest intraday decline on record. Investors openly suggested that it was only a matter of time before rates hit 0% or lower.By Tuesday, however, the long-bond yield would reach as high as 1.3236%, or about 63 basis points above where it was just 36 hours earlier. Both on the way down and the way up, the swings were unprecedented since the 30-year maturity was introduced in the 1970s. Treasuries are not supposed to trade like that.It soon became clear that the world’s biggest bond market was dealing with its worst liquidity conditions since 2008. Benchmark yields increased even when stocks plunged. Simply put, Treasuries weren’t acting like the safe haven they’ve always been. That forced the Federal Reserve into action, with the central bank announcing Thursday that it would start purchasing government securities of all maturities, rather than just short-term bills.Welcome back to the world of quantitative easing.The drastic swings in the long bond naturally skewed the yield curve:The yield curve from five to 30 years went from the steepest since October 2017 to the flattest since February 2019, back toward its steepest levels in the span of just a few days. If it wasn’t obvious from the chart, these huge swings don’t happen ordinarily. Usually, bond traders are hypersensitive to moves in the curve because it can suggest relative value opportunities depending on their outlook for the economy and the path of monetary policy.But when it’s hard to transact, those sorts of bets tend to fall by the wayside quickly. Traders can’t be picky with where liquidity presents itself.Just to round out evidence of the wild trading in Treasuries this week, consider the 10-year U.S. Treasury Note Volatility Index. It reached a level rivaled only by the one during financial crisis:If all goes according to the Fed’s plan, the volatility should disappear soon. The central bank will be buying $60 billion of Treasuries “across a range of maturities,” it announced Thursday, “to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak.” It’s unclear if that will be enough — Wall Street strategists have said a better option would be for the Treasury Department to buy back older, less-liquid securities.One likely reason the Fed acted so swiftly to calm the Treasury market’s malfunctioning is because it serves as the benchmark for so many other securities. Like municipal bonds, for instance:On Monday, the ratio of 10-year muni to Treasury yields spiked to 150%, the highest level since 2009. That made sense — Treasuries staged a huge rally, and munis fell far behind. Then on Tuesday, as Treasuries sold off, munis moved comparatively less (also as expected), and the ratio fell back toward normalcy.After that, the going got weird.On Wednesday, 10-year muni yields rose 27.5 basis points even though Treasury yields rose only slightly. And on Thursday, as Treasury yields fell, muni yields soared by a record 45 basis points, pushing the ratio to 189%, within spitting distance of its all-time high.“I don’t think anyone knows what’s going on,” Jason Appleson, a portfolio manager for PT Asset Management LLC, told Bloomberg News. One thing that money managers do know for sure: Investors wanted out of fixed-income funds this week, no matter the type:U.S. investment-grade debt funds experienced a record outflow of $7.27 billion in the week through March 11, according to Refinitiv Lipper data. Junk bond funds lost $4.94 billion and leveraged-loan funds suffered $2.07 billion of withdrawals. The combined exodus of $14.29 billion is unprecedented, exceeding last week’s record of $12.2 billion.High-yield muni funds were also particularly hit hard, with investors yanking $1.7 billion, the most since Lipper data begin in 1992.But back to leveraged loans, which have fallen off a cliff:The S&P/LSTA Leveraged Loan Price Index fell on Thursday to 88.26 cents on the dollar, the lowest in more than a decade. It’s partly for the same reasons as last week — the loans are floating-rate obligations, which are less appealing when the Fed is expected to drop interest rates to zero. Plus, they’re just risky in general, so they’ll tend to move lower with stocks.But notably, private equity firms Blackstone Group Inc. and Carlyle Group Inc. reportedly told their portfolio companies this week to do what it takes to avoid a credit crunch, including tapping lines of credit. The two are heavily involved in leveraged finance, so their comments indicate some fear that this turbulent period in markets and the economy could cause some weaker companies to go bust.That same concern is showing up elsewhere. For instance, the average cost to insure against default on a basket of corporate high-yield bonds is surging:The Markit CDX North America High Yield Index rose to 443 basis points at the end of last week. That seemed quite high at the time — rivaled only by the risk-off episode in late 2018. The prevailing level now has no rivals. The cost surged to 685 basis points, the highest since data begin in 2007. It has become so extreme, in fact, that Morgan Stanley said credit investors should remove CDX hedges because they’re no longer working.The investment-grade CDX is also lurching higher. At 139 basis points, it’s the highest since 2011, when it reached as high as 151 basis points. Within the high-grade index, the company-specific credit-default swaps that fared worst include those tied to Royal Caribbean Cruises Ltd., Apache Corp., Hess Corp., Boeing Co. and Carnival Corp.Meanwhile, trading in the bonds themselves indicates that the reach for yield is over for most investors:Just about every corporate yield spread has widened to levels unseen since early 2016.The spread between single-B and double-B junk bonds climbed to 204 basis points. The spread between double-B and triple-B corporate bonds, which crosses the divide between investment-grade and speculative-grade, increased to 264 basis points. The spread between triple-B and single-A bonds widened to 91 basis points.In December, I questioned what a junk bond even meant anymore when these spreads tightened so drastically. My fellow Bloomberg Opinion columnist Mohamed El-Erian said at the time that investors should buy higher-quality debt. “This is the best up-in-quality trade that exists,” he said. “You don’t give up much yield, and you get a lot more balance-sheet resilience.”Those who stayed greedy into 2020 are now paying the price.Many of the credit-market trends in the U.S. extend into Europe. The cost to insure against defaults of the region’s speculative-grade companies is at the highest since 2012, while CDS insuring investment-grade firms is the highest since 2013. The yield spread on a Bloomberg Barclays index of investment-grade European companies surged by the most since 2001 earlier this week.But arguably the most significant move was in the so-called peripheral sovereign bonds from Spain, Portugal, Italy and Greece after European Central Bank President Christine Lagarde’s most recent decision and press conference:On Thursday, 10-year yields rose as much as 72 basis points in Italy, the most ever, while they climbed 50 basis points in Greece, 31 basis points in Portugal and 25 basis points in Spain. In what some central bank observers saw as a major slip-up, Lagarde said that the ECB was “not here to close spreads.”“I didn’t realize the ECB’s primary mandate was to cause a bond market crisis,” quipped Peter Chatwell, head of European rates strategy at Mizuho International Plc. The central bank didn’t lower interest rates, and it announced bond purchases will be focused on the private sector.The ECB’s decision wasn’t perfect, but it was probably the responsible one. Central banks and governments across the globe are stepping up their efforts to curb the economic fallout from the coronavirus outbreak. Lagarde didn’t need to push interest rates even further negative just to appease traders. Regardless, she still contributed in a big way to the market’s mayhem. Will it be Fed Chair Jerome Powell’s turn next week? Will the U.S. Congress pass some sort of fiscal stimulus measures? At this point, traders can’t take anything for granted.To contact the author of this story: Brian Chappatta at firstname.lastname@example.orgTo contact the editor responsible for this story: Daniel Niemi at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.