Stone Energy’s debt
As of June 30, 2016, Stone Energy’s (SGY) total debt stood at ~$1.4 billion. With ~$169 million in cash and cash equivalents, SGY’s net debt was ~$1.24 billion at the end of 2Q16.
Net debt-to-adjusted EBITDA
Net debt-to-adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) is a debt ratio that shows how many years it will take for a company to pay back its debt under its current situation. As of 2Q16, SGY’s net debt-to-adjusted EBITDA is very high at ~8x.
When compared to its own net debt-to-EBITDA historical average of ~2.2x, SGY’s current net debt-to-adjusted EBITDA is much higher. The steep increase in net debt-to-adjusted EBITDA ratio in 2Q16 can be attributed to the steep decrease in adjusted EBITDA.
Net debt-to-adjusted EBITDA trend
Stone Energy’s net debt-to-adjusted EBITDA ratio has been increasing since 2Q14. Stone Energy’s net debt-to-adjusted EBITDA ratio has increased from ~1.3x in 2Q14 to ~8.0x in 2Q16. This increase in net debt-to-EBITDA ratio can be attributed to the increase in its net debt as well as a steep decrease in adjusted EBITDA during the same period.
From 2Q14 to 2Q16, Stone Energy’s net debt increased from ~$700 million to ~$1.2 billion, whereas its trailing-12-month EBITDA has decreased from ~$546 million to ~$155 million during the same period.
As of 2Q16, Stone Energy has a negative stockholder equity of about -$429 million. Due to this, Stone Energy’s leverage in 2Q16 can’t be calculated. Stone Energy had a leverage of ~361% in 3Q15 before its stockholder’s equity turned negative in 4Q15. This level of leverage was on the much higher side when compared with other oil and gas companies.