http://www.bloomberg.com/news/articles/2015-01-30/oil-plunge-puts-390-billion-hole-in-investors-pockets

There was a report out yesterday that was showing EXXI's PDP value (production blow down) at $60/bbl doesn't even cover 70% of their debt obligations. So EXXI needs a big price recovery very soon and the sale of their pipeline is not nearly going to be enough

Just a matter of time till BK.

I was looking at them the other day, they are in big trouble....

I would short this one if anything. Same goes for HK or SD. Downside would be a buy out that is favorable for the stock. Don't see it being that favorable even if they do get bought out.

Most brokers can't find shares to borrow in these secturites, so yiu will have to use options.

Strong day for EXXI today. Hoping it drops back down today, so I can buy back in.

Up sharply again, 14.4% today

Broke $4! WHEEEEEEEEE

We're going to $40

I bought in around $7 with a relatively small position. Would y'all recommend selling now at $4, and then shorting, and buying again when it falls back below $3? I don't see myself breaking even for a long time with this stock if I wait for it to hit $7 again.

I wouldn't mess with shorting any of these small E&P stocks. Too much uncertainty and risk associated with that.

FCX announces 75 MMcfd production test of Highlander well, EXXI has 18% working interest

some nice wildcatters involved in that project.

Jim Bob Moffett and Tex Moncrief.

http://www.houstonchronicle.com/business/columnists/tomlinson/article/Analysts-circulating-oil-company-death-lists-6113215.php

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http://www.houstonchronicle.com/business/columnists/tomlinson/article/Analysts-circulating-oil-company-death-lists-6113215.php

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If low crude prices will cull the weak out of the oil industry herd, it's only natural to wonder which companies are doomed.
Based on the number of "death lists" floating around the Internet, there are plenty of analysts out there willing to share an opinion. Not all of them, though, are necessarily accurate.

The key indicator of distress, most of these lists agree, is the company's debt compared to its equity and earnings before interest, taxes, depreciation and amortization. One list published by the Oxford Club, an investor newsletter based in Baltimore, calls these toxicity ratios. If the debt to earnings ratio is more than four to one, writes energy stock analyst David Fessler, a company is in trouble.
"Companies above this range are less likely capable of handling their debt burdens," Fessler advises, though he did not respond to a request for an interview. "If the costs of financing debt begin to outweigh the return a company earns on that debt, bankruptcy is right around the corner."
Two companies that frequently show up on these lists are Houston's Halcon Resources Corp., and Energy XXI, a Bermuda-based company with corporate offices in Houston. No one from the companies responded to emails and phone calls requesting comment on whether their companies can make it through the current low-price environment without facing bankruptcy or acquisition by a larger company.
OPINION

Halcon is an independent exploration and production company that focuses on land-based drilling. Halcon bought GeoResources, a Houston oil company, for $972 million in 2012, sold $300 million in assets to refocus the company in 2013 and began slashing its budget in November to cope with the drop in oil prices that has sent the industry spinning.
Halcon has $3.75 billion in debt, and adjusted earnings of $773.5 million. But the company's cash flow after capital expenditures was -$899.5 million in 2014. Floyd Wilson, Halcon's CEO, is reducing spending while trying to maintain oil production to keep revenue coming in.
"We're not the kind of company that sits around in hopes that things get better over time," Wilson told analysts during a conference call Feb. 26. "We've been through this before, and we'll be through it again sometime."
Using the toxicity ratios, though, Halcon won't see the light at the end of the tunnel. At the end of the last quarter, the debt to earnings ratio was 7.6 to 1 and the debt to equity was 198.31 percent, which means the debt is nearly twice the value of the shares in the company.
In the offshore arena, Energy XXI was formed in 2005 and holds reserves in the Gulf of Mexico. In 2010, the firm bought $1 billion worth of assets from Exxon Mobil and, last summer, Energy XXI took on even more debt to buy EPL Oil & Gas for $1.5 billion.
Energy XXI has $7.4 billion in assets, but owes $3.781 billion, as of Dec. 31. The debt to earnings ratio was 5.15 to 1 and debt to equity was 210.34 percent. The company's results for the quarter showed a net loss of $376 million from lower than expected production.
John Schiller, CEO of Energy XXI, said his company recognizes the need to overhaul operations "from top to bottom."
"The culture of the company has changed with more focus on cost savings and low-risk projects," Schiller promised, according to an earnings call transcript produced by investor web site Seeking Alpha. The company has liquidated some oil futures contracts, is cutting capital expenditures and selling some acreage and a pipeline.
Using the toxicity ratios, these companies are in equally dire straits. But dig a little deeper and their stories are very different.
Andrew Ragsly, North America managing editor for the credit-tracking service Debtwire, says you also have to analyze the company's liquidity and where the debt trades on the bond market.
"You have to look at the cash flow and the liquidity to see how long these guys can last," he said. "Energy XXI, that's really dangerous ... their debt trades at 40 cents (on the dollar)."
Energy XXI will also face tighter borrowing when the value of the oil and natural gas reserves it uses for collateral is redetermined to reflect current prices this spring. If the company had hedged more of its oil on the futures market, the lower prices would not be so damaging to the its credit lines, which lenders frequently tie to earnings.
"The latest quarterly results continues a trend of missing projections and leaving Wall Street scratching their heads," said one analyst note from Stone Fox Capital, an investment advisory firm.
Halcon, on the other hand, hedged 80 percent of its oil against lower prices for the next two years, maintaining the value of the reserves it uses for collateral. Halcon's unsecured bonds traded at 70 cents on the dollar, a level Ragsly said is pretty good right now.
Halcon's moves to keep spending within cash flow signals it has a chance to survive, Ragsly added. Other analysts agreed.
"We continue to believe that Halcon has the ability to see this through to the other side," analyst Jason A. Wangler wrote for Wunderlich Securities after the conference call.
Clearly, there is much more to evaluating a company than two simple ratios highlighted in an email blast.
Yet even for the most troubled, Ragsly told me, "the savior for a lot of these companies will probably be hedge funds coming in and providing emergency or rescue financing that will bridge them to a turnaround."
Literally one minute after I hung up the phone with him, a press release arrived: "Energy XXI Gulf Coast, Inc. Announces Private Offering of $1.25 Billion of Senior Secured Second Lien Notes Due 2020."
Hallelujah for them, Energy XXI will live to fight another day. But whether that was a wise investment for the lien holder is the subject for another column.

Just to put it in perspective... EXXI trying to launch a $1.2 b second lien loan right now, which will probably end up at an 11-12% rate. They are doing this to pay down their fully drawn revolver (which is at ~3%)....

So they are paying of credit cards with much more expensive credit cards and their interest payment would be an incremental $100 mm of interest payments

They are paying for liquidity and time, plain and simple.

so it's like a super-sized payday loan?

Upsized from $1.25B to $1.45B.

The capital markets are now wide open. Get ready for a flood of offerings to put cash in the coffers of E&P companies.

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Just to put it in perspective... EXXI trying to launch a $1.2 b second lien loan right now, which will probably end up at an 11-12% rate. They are doing this to pay down their fully drawn revolver (which is at ~3%)....

So they are paying of credit cards with much more expensive credit cards and their interest payment would be an incremental $100 mm of interest payments

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oh god..those rates...

What's going on with this stock? It was trading at 3.07 this morning and jumped up to 3.45 by the afternoon. Is it safe to jump back in again?

It's because of the federal reserve decision that was made, or going to be made in the future, this afternoon.

I feel like this is going to make things much more volitile now. Yeah, the dollar is getting stronger, but oil is still down. It's hard to figure out what to do...

Couple of big developments today:

Reached a deal with BOEM for P&A bonding and sold Grand Isle Gathering System to CorEnergy Infrastructure Trust for $245MM

what's it all mean man?

what a strange emoticon I accidentally used....the eyebrows make all the difference.

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Reached a deal with BOEM for P&A bonding a

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Can somebody explain what this is talking about?

O&G companies that operate in Federal waters have to have bonds to cover their well/facility abandonment liability in case they go bankrupt. The Feds just raised their bonding requirements so EXXI had to meet those requirements otherwise they could be blocked from doing any new drilling or workover work in fields that aren't adequately covered. They've been negotiating with the government for a while over how much supplemental bonding was needed and it looks like they got a pretty favorable deal compared to original estimates.

Still in bad shape overall. It'd be like having a broken neck, back, arm, and finger then having the doctor tell you that your arm set great and both it and your finger were covered by insurance. You still have a broken neck and back....

Thanks for the fascinating analogy Mays. It's so much more clear now!

There's a reason people are calling them EXX Bye...

Down another 5% today to $2.49

Sold East Bay Field for $21 mil

Hit $1.68 this morning, not looking good. Lot of good Ags that work there.