Texas energy data wrap: Oil and gas cos. face ratings downgrades in 2019

One of the big three credit ratings agencies reported a downward trend in the ratings of oil and gas companies throughout 2019 — and it reached a fever pitch during the fourth quarter. Read more about that and other data points to know in Texas energy this week.

Credit ratings

Moody’s Corp., one of the big three corporate credit ratings agencies, gave out more credit downgrades than upgrades to oil and gas companies for the fifth consecutive quarter in the final quarter of 2019, according to a report published by the firm on Jan. 31. The fourth-quarter downgrades vastly outnumbered the upgrades during that period, marking an acceleration of a trend that has been present since Q4 2018. The firm downgraded the credit rating of 15 companies during the fourth quarter, compared to two upgrades.

“Volatile oil prices throughout 2019 and natural gas prices that steadily declined in the second half of the year led speculative-grade investors to shun all but the strongest oil weighted companies, increasing default risk for companies that already had low ratings,” Moody’s said in the report.

Texas jobs

Texas accounted for 40 percent of all oil and gas jobs in the U.S. during 2019, according to a report by the Texas Independent Producers and Royalty Owners Association. There were a total of 361,271 direct oil and gas jobs in Texas in 2019, up 5,550 from the prior year. Those jobs paid an average wage of $132,104 per year, higher than the national average oil and gas pay of $114,745 annually.

Oil and gas prices

NYMEX crude futures cost $53.48 per barrel on Jan. 28, according to the most recent data available from the U.S. Energy Information Administration. That marks a significant decline since highs in the $63-per-barrel range seen at the beginning of the month. Natural gas futures reached $1.829 per million British thermal units Jan. 30.

Rig count

The Texas oil and gas rig count decreased again in the week that ended Jan. 31, falling by two to land at 395 at the end of the week, according to data published by Houston-based Baker Hughes Co. (NYSE: BKR). That’s down 119 rigs from the comparable date in 2019. The North American rig count was down by a single rig to end the week at 1,037. That’s 251 rigs lower than the prior year date.

By Joshua Mann – Senior Reporter

Courtesy of Houston Business Journal

https://www.bizjournals.com/houston/news/2020/02/03/texas-energy-data-wrap-oil-and-gas-cos-face.html