Rex Energy (REXX) gapped up 14% Wednesday on big volume of more than 3.1 million shares traded. Oil surged above $32 per barrel after nearly dropping below $30 early Wednesday.
Rex Energy tops energy plays Wednesday
Rex Energy’s shares have performed horribly in the past 12 months, falling from a high of $5.74 to a low of $0.49 in February. Its stock price is now up more than 30% to an intra-day high of $0.655 today. Its 14.8%move Wednesday was enough to capture the Daily Stock Challenge Breakout award in February’s Stock Challenge.
The company’s latest press release is from February 3rd when it announced an offer to exchange its outstanding 8.875% senior notes due in 2020 and its 6.250% senior notes due 2022 for new 10.00% senior secured second lien notes due 2020 and shares of common stock.
We’ve been writing about the growing threat of significant bond defaults. Below is an excerpt from an article this morning:
“J.P. Morgan has been sounding the alarm on exposure to energy bonds, or loans given out in the past decade that are maturing. The subtitle of an article from yesterday reads: Bank plans to build reserves by another $500 million tied to oil-and-gas exposure.
Bond pain has arrived in Canada as RBC announced this morning that it missed Q4 profit estimates.
Reuters reported Wednesday morning that:
“Gross impaired loans in the oil and gas industry almost doubled to C$310 million ($224.04 million) from the fourth quarter. Those loans were just C$5 million in the year-earlier period.”
source: http://ca.reuters.com/article/businessNews/idCAKCN0VX17G”
Click here to read Rig counts decline in US & Canada.
Below is an excerpt from Rex’s latest press release:
“Rex Energy announced a the commencement of an exchange offer and consent solicitation related to the Company’s outstanding 8.875% Senior Notes due 2020 (the “2020 Notes”) and 6.250% Senior Notes due 2022 (the “2022 Notes” and, together with the 2020 Notes, the “Existing Notes”). The Company is offering to exchange (the “Exchange Offer”) any and all of the Existing Notes held by eligible holders for up to (i) $480,000,000 million aggregate principal amount of the Company’s new 10.00% Senior Secured Second Lien Notes due 2020 (the “New Notes”) and (ii) 10,125,000 million shares of the Company’s common stock (the “Shares”), upon the terms and subject to the conditions set forth in the Company’s Confidential Offering Memorandum and Consent Solicitation Statement and related Letter of Transmittal, each dated February 3, 2016.”
Click here to read the entire press release.
As the oil market worsens, expect press releases of this nature to be the norm as senior companies rush to shore up cash and keep their creditors at bay.
Gold stocks dominate February Stock Challenge
Long-time member ‘hawaiianeye‘ selected Rex Energy for February’s Stock Challenge and enjoyed a14.56% pop Wednesday.
New Pinnacle member ‘gmcrockwood‘ is back on top with a triple digit return of 112.48%. There are just three trading days left in February’s Stock Challenge and it is still anyone’s game.
Gold was down $4 Wednesday afternoon trading to $1,225 an ounce. The Market Vectors® Junior Gold Miners ETF (GDXJ) has been resilient in the face of volatile gold prices and closed at $25.25 – up 2.52%.
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