Commodity weakness hurts related preferreds; New Source Energy preferreds stop trading

By Christine Van Dusen

Atlanta, Dec. 7 – Trading of New Source Energy Partners' series A preferred stock was suspended on Monday, suffering alongside other energy-related names as plummeting oil prices took their toll on the market.

The Oklahoma City-based independent oil and natural gas properties company’s 11% cumulative convertible preferreds got “hammered” before trading was suspended, a trader said.

“That’s a little sketchy,” he said.

New Source recently announced that its revenue, profitability and cash flow have been significantly affected as a result of the substantial drop in oil, natural gas and NGL prices and the related significant drop in rig count.

The company has also said it may not have sufficient funds to cover its operational and financial obligations over the next 12 months, raising substantial doubt as to its ability to continue as a going concern.

Weakness in commodities also hurt Breitburn Energy Partners LP, which saw its 8.25% series A cumulative redeemable preferred units (Nasdaq: BBEPP) fall to $5.58 on Monday morning after declining 12.85% to $6.85 last week. The notes clawed some of the way back up by the end of Monday's session, closing at about $6.76.

Legacy Reserves LP’s 8% series B fixed-to-floating rate cumulative redeemable perpetual preferred units (Nasdaq: LGCYO) were also weaker, moving to $7.79 on Monday morning after declining 8.12% to $8.71 last week. The notes closed Monday even lower, at $7.24.

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