Big Shale Borrowers on Fast Track to Junk in Latest Oil Rout
- Occidental, Apache, Noble Energy among potential fallen angels
- Spending cuts may not be enough to stave off downgrades
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The latest crash in oil prices is threatening to push $140 billion of investment-grade energy debt over the edge into junk.
Despite the modest recovery after 2016, oil prices have been capped by plentiful global supplies, and at the same time the U.S. shale sector has exhausted the patience of many equity investors with consistently poor returns. Now, the industry has been blindsided by the double whammy of a supply shock from the coronavirus and an oil price war, and President Donald Trump’s efforts to prop up prices is unlikely to offset more expected supply from major producers.