Moody’s Says O&G Company Default Rate in 2015 Going Higher

On Tuesday Moody’s Investors Service released a new report titled “Oil and Gas: The Bad, Ugly and Good.” The 12-page, which will set you back $550 (or free if you’re company subscribes to Moody’s) says, in essence, because the price of oil is recovering slowly, instead of quickly, “weaker oil & gas issuers are at a much greater risk of default.” That is, some drillers in 2015 will either go under or get bought out. How many? A high level summary of the report (below) doesn’t say how many. What it does say is that of all the companies rated by Moody’s with a credit rating of B3 or lower (too much debt, not enough revenue), 15% of all the companies in that list are oil & gas companies. That’s up from 8% of all companies in the list a year ago. In other words, it’s getting worse for drillers (or exploration & production companies, as it’s more properly called)…

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