Morning Commentary: Cobalt paper continues to decline; Goodrich stock gains ahead of earnings

By Stephanie N. Rotondo

Phoenix, Aug. 6 – Cobalt International Energy Inc.’s convertible debt and equity remained on the decline Wednesday, just one day after the company reported weak earnings.

The 3.125% convertible notes due 2024 were seen at 92.13 early in the session, down over a point from Tuesday’s close. The 2.625% convertible notes due 2019 were meantime pegged at 84.99, off about a quarter-point.

As for the stock (Nasdaq: CIE), it was down 22 cents, or 1.55%, to $14.00 at mid-morning.

On Tuesday, the Houston-based oil exploration and production company reported a wider-than-expected loss for the most recent quarter. The company also disclosed that it had received a Wells notice from the U.S. Securities and Exchange Commission – a warning that the SEC plans to bring an enforcement action against a person or company – relating to Cobalt’s oil operations in Angola.

Elsewhere, a trader noted that Goodrich Petroleum Corp.’s (Nasdaq: GDP) stock was “finally having an up day,” after steadily dropping over the last month and a half.

In mid-June, the equity was trading around $30, the trader said. As of Tuesday’s close, the issue was at $17.44.

But come the midweek session, the stock was pushing up 49 cents, or 2.81%, to $17.93 in early trades.

There hadn’t yet been much movement in the company’s convertible bonds, but the trader noted that the company reports earnings on Thursday, which could create some volatility.

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