From the Houston Chronicle
HOUSTON — Oil and gas companies could default on an additional $40 billion in debt this year, according to a report by credit group Fitch Ratings.
Fitch Ratings said that $6 billion of energy debt was already in default this year, and that it expects energy companies to fall out of compliance on the terms of $9 billion worth of debt agreements over the next month. After that, an additional $40 billion could come in 2016.
Through all of 2015, $17.5 billion in energy debt was in default.
The past three energy defaults have involved missed interest payments, Fitch noted, adding that four more companies are expected to miss payments before the end of April. Those companies are Chaparral Energy, Linn Energy, Energy XXI and Goodrich Petroleum.
On Tuesday, Linn Energy said that it would miss interest payments on two loans. The company said a Chapter 11 filing “may be unavoidable,” in a filing with the U.S. Securities and Exchange Commission.
