| Falling Prices Made Rating Agencies Bearish on Upstream Stocks | |
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How Did Energy Streams Look after the Fed's Rate Hike? (Continued from Prior Part) Upstream companies’ growing debt
The total debt for EQT (EQT) and Cabot Oil and Gas (COG) grew by 19% and 52%, respectively, on a YoY (year-over-year) basis in fiscal 3Q15. However, EOG Resources (EOG) saw its debt fall by 0.5%. On the other hand, Pioneer Natural Resources’ (PXD) debt grew by only 0.45% in fiscal 3Q15 on a YoY basis. EOG and Pioneer Natural Resources have weights of 4.0% and 3.3%, respectively, in the Energy Select Sector SPDR Fund (XLE). Also, Devon Energy’s (DVN) debt fell by 6% in fiscal 3Q15.
Weighted average cost of debt
The graph above shows the upstream companies’ debt growth and the weighted average cost of debt. In fiscal 3Q15, the weighted average cost of debt for large-cap downstream companies was 2.5%. The weighted average cost of debt for these upstream companies stood at 2.9% at the end of fiscal 3Q15. Additionally, falling crude oil prices made rating agencies bearish on these companies’ stocks. If the current situation prevails, the upstream industry could experience stiffer rules and higher interest to raise the debt.
Interest coverage ratio
Crude oil was also trading below $36 per barrel as of December 18. Upstream companies’ average interest coverage ratio in fiscal 3Q15 was 4.9x compared to the 9x of large-cap downstream companies. Upstream companies are more likely to be impacted by the rate hike than their downstream peers.
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EOG Resources
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CODE : EOG |
ISIN : US26875P1012 |
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ProfilIndicateurs de MarchéVALEUR : Projets & res.Communiqués de PresseRapport annuelRISQUE : Profile actifsContactez la cie |
EOG Res. est une société de production minière et de pétrole basée aux Etats-Unis D'Amerique. EOG Res. est cotée aux Etats-Unis D'Amerique. Sa capitalisation boursière aujourd'hui est 78,5 milliards US$ (73,4 milliards €). La valeur de son action a atteint son plus bas niveau récent le 11 juillet 2003 à 10,00 US$, et son plus haut niveau récent le 26 avril 2024 à 135,70 US$. EOG Res. possède 578 636 343 actions en circulation. |