Energy names off despite oil-price surge; Samson slides; Fortescue, Cliffs fall, but ANR up

By Paul Deckelman

New York, April 1 – Oil prices surged on Wednesday amid a report indicating a fall in domestic crude oil production and speculation that the Iran nuclear talks with the United States and other major nations aren’t going very well.

But that was little help to what could be considered distressed energy sector bonds, which took it on the chin again, along with natural resources names.

These included Samson Investment Co., whose bonds slid badly in heavy trading after another cut in its credit ratings.

Another company seeing its ratings cut, pushing the bonds lower – though nowhere near the plunge that Samson took – was Pacific Rubiales Energy Corp.

Iron ore producers like Fortescue Metals Group Ltd. and Cliffs Natural Resources Inc. were being beaten up as iron ore prices hit their lowest levels in a decade.

Coal-mining names like Peabody Energy Corp. were also getting buried.

But one coal name that was the exception to the rule on Wednesday was Alpha Natural Resources Inc., on the news that the company had bought back almost $600 million of various junk bond and convertible notes for slightly more than half of that amount.

And from the underperforming retail sector, Sears Holdings Corp.’s bonds were better on the news that the company plans to raise capital by selling some of its top properties and leasing them back.

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