THE BEAR ROARS IN 2016; OIL STOCKS SMASHED TO PIECES

It isn’t even panic anymore. Investors are resigned to the idea that the whole ball of wax will go up in flames. Double digit losses in the basic resource space, across the board. As a group, oil stocks fell more than 6% today–as WTI and Brent fell 6% for the session–an amazing achievement onto itself.

More important than the equity picture is the state of the oil and gas credit markets. Companies like CHK and UPL are done, toast. However, there are other names that are starting to look like–they too–might soon succumb to the pressures of the market. Here are some oil and gas stocks to keep your eyes on, as the “next shoes to drop”, so to say.

(stock, debt/eq level, amount of debt)

VNR, 4.8x, $1.9 billion
DNR, 4.8x, $3.3 billion
EPE, 4.3x, $4.9 billion
TRGP,4.1x, $6.1 billion
WLL, 2.8x, $5.2 billion

Big Game problems

PBR, 4.7x, $127 billion
VALE, 2x, $32 billion
ETP, 1.6x, $32 billion
WMB, 1.2x, $23 billion
MT, 2.7x, $20 billion
LNG, 1.8x, $16 billion
RIG, 2x, $8.7 billion

On the bright side, both JNK and HYG are flat on the day.