Oil Sands Dream Evaporates With 40% Bondholder Loss Seen
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Southern Pacific Resource Corp.’s failure to find a buyer may leave bondholders struggling to recoup little more than half their investment as the Canadian oil-sands energy explorer burns through cash.
The Calgary-based company’s 8.75 percent notes due 2018 dropped 10 cents today to 63 cents on the dollar. Desjardins Capital Markets analyst Justin Bouchard estimates the notes are worth 57 cents, based on the company’s assets. Raymond James Ltd. analyst Chris Cox projects Southern Pacific has six months before exhausting its remaining C$34 million ($31 million) of working capital.