We’ll now discuss the losers from the upstream sector in the US for the week starting November 20, 2017. We have considered only oil and gas producers with market capitalizations of greater than $100 million and an average trading volume last week greater than 100,000 shares.
EP Energy was top loser
In the week starting November 20, 2017, EP Energy (EPE) fell from $2.49 to $2.02, a decrease of ~19%. On Tuesday, EP Energy (EPE) fell ~20% on heavier than 30-day average volume after the company announced a debt exchange offer. On Monday, EPE launched a debt exchange offer to exchange up to $1.2 billion of new 9.38% senior secured notes due in 2024 for various outstanding senior notes due in 2020, 2022, and 2023. EPE has been in a continuous downtrend since the start of 2017. Year-to-date, EPE is down by ~69%.
On the list of top decliners, EP Energy (EPE) is followed by Stone Energy (SGY), which fell from $34.34 to $30.64, or by 10.8%. On November 21, 2017, Stone Energy (SGY) announced the merger with Talos Energy. The new company will be called Talos Energy, and its shares will trade on the New York Stock Exchange under the ticker ‘TALO.” SGY stockholders will receive one share of new Talos Energy for each outstanding common share of SGY, whereas current Talos stakeholders will be issued ~34.2 million common shares of new Talos Energy. According to SGY’s press release, the new Talos Energy will have pro forma estimated production of 47 Mboepd (thousand barrels of oil per day) for 2017.
Other top decliners from the oil and gas production industry include Bill Barrett (BBG), California Resources (CRC), and Gulfport Energy (GPOR). These stocks are down by 7.8%, 5.8%, and 5.4% so far this week. Overall, the First Trust Natural Gas ETF (FCG), which represents an index of stocks across the natural gas exploration and production industry, is almost flat this week. In comparison, the SPDR S&P 500 ETF (SPY) rose 0.74% this week.