Fitch: Ratings Outlook for U.S. Oil & Gas Revised to Negative on Lower Prices
Fitch Ratings has revised its 2016 rating outlook for the U.S. Oil & Gas
industry to Negative from Stable, reflecting the impact of lower oil and
gas prices, and Fitch's downward revision of its corporate oil & gas
price deck earlier this month. These factors are likely to increase the
number of negative ratings actions seen across the sector.
As of Jan. 24, 2015, approximately 29% of companies in Fitch's U.S. oil
& gas portfolio had Negative Outlooks. Low prices hit high yield oil &
gas issuers hard last year, and they remain under considerable stress in
this downturn. Single 'B'-rated companies in particular face a variety
of challenges, including a higher cost base, declining hedge coverage,
lack of financeable assets and limited market access.
The credit impact of lower oil and gas prices is beginning to ripple out
across the investment grade energy space. While most investment grade
names have decent liquidity, cost positions, capex flexibility, and
capital markets access, the current environment has pressured credit
metrics enough to put downward pressure on ratings. Investment grade
E&Ps currently on Negative Outlook include ConocoPhillips, Hess, and
Southwestern Energy Company.
The full report, '2016 Outlook: U.S. Oil & Gas: Rating Outlook Shifts to
Negative,' is available at www.fitchratings.com.
Additional information is available at 'www.fitchratings.com'.
2016 Outlook: U.S. Oil & Gas (Rating Outlook Shifts to Negative)
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Copyright Business Wire 2016
Source: Business Wire
(January 26, 2016 - 4:22 PM EST)
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