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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Chevron Corporation | NYSE:CVX | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.33 | -0.21% | 160.40 | 160.66 | 157.04 | 160.58 | 11,780,661 | 01:00:00 |
Standard & Poor's Ratings Services downgraded the junk-territory ratings on 25 oil-and-gas companies on expectations that credit quality will deteriorate owing to low commodities prices and reduced production.
The credit-ratings firm, which also affirmed the ratings of an additional 20 speculative-grade exploration-and-production companies, said the ratings actions followed a revision of S&P's price assumptions for crude and natural-gas.
Whiting Petroleum Corp. and Oasis Petroleum Inc. were among the companies to receive downgrades. Their shares fell 9.9% and 8.2%, respectively, in recent trading.
Since the start of the year, all three of the world's top ratings firms have warned that oil company credit standings are at risk.
Last week S&P had cut the ratings of 10 U.S. oil and gas exploration and production companies, including investment-grade Chevron Corp., citing the sharp drop in crude oil prices. Meanwhile, Exxon Mobil Corp.'s triple-A corporate rating was placed on watch for a possible downgrade.
The ratings actions Tuesday included a number of multinotch downgrades and the outlooks for many of the companies' ratings were negative, in a sign that further cuts are possible.
S&P said the latest ratings actions also reflected liquidity risks, particularly those related to the redeterminations of the companies' revolving credit facility borrowing bases coming in April. S&P said it expects that the borrowing bases for most of the energy firms will decline as the result of hedges rolling off this year, a lack of reserve replacements resulting from reduced production in 2015 and futures prices that are below many bank borrowing base prices.
S&P estimated that the energy company's borrowing bases, on average, will decline between 20% and 30% at the next resetting.
The company said the ratings actions also reflect the possibility of capital restructurings or distressed-bond exchanges given current bond prices.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
February 09, 2016 16:15 ET (21:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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