Oil and gas names active ahead of OPEC meeting; J. Crew posts wider loss, parent notes decline

By Stephanie N. Rotondo

Phoenix, June 4 – The distressed oil and gas sector came back into focus on Thursday, ahead of a semiannual meeting of OPEC in Vienna on Friday.

Chatter is that the oil cartel will maintain its current production levels of around 30 million barrels a day. Iran and its potential to produce up to 1 million barrels per day might be part of the discussion as well.

Should OPEC production stay at current levels, that could mean continued volatility in oil prices – especially as U.S. production is at or near all-time highs.

Ahead of the meeting, oil and gas bonds were trading in mixed fashion.

A trader said Halcon Resources Corp.’s debt was weaker, seeing its 8 7/8% notes due 2021 falling half a point to 71½.

The 9¾% notes due 2020 slipped a quarter-point to 74¾.

Energy XXI Ltd. was also softer, as the 8¼% notes due 2018 declined 2½ points to 65.

Among oil drilling companies, Parker Drilling Co.’s 6¾% notes due 2022 were steady at 86¾, as were Hornbeck Offshore Services Inc.’s 5% notes due 2021, which closed around 87.

For its part, oil prices were heavier on the day.

West Texas Intermediate crude dropped $1.47, or 2.46%, to $58.17 a barrel and Brent crude lost $1.60, or 2.51%, to close at $62.20.

J. Crew parent notes drop

Away from energy names, Chino Intermediate Holdings A Inc.’s 7¾% PIK notes due 2019 were weakening after its indirect subsidiary, J. Crew Group Inc., released its first-quarter results.

A trader called the issue off over 4 points at 81.

For the quarter, the New York-based retailer reported a 2% decline in total revenue, which came to $581.8 million. Same-store sales meantime dropped 8%.

Operating loss was $520.6 million and compared to operating income of $34 million in the same quarter of 2014.

Net loss was $462.4 million, wider than the $30.1 million loss reported the year before.

Adjusted EBITDA came to $44.8 million, versus $64.8 million the year before.

At the end of the quarter ended May 2, cash and equivalents was $64.5 million, up from $59.4 million. Total debt declined slightly year over year to $1.55 billion from $1.56 billion.

© 2015 Prospect News.
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