SGY bank debt inching upThe bank debt of SGY went up from quarter end June 2015 to September 2015 from $103 million to 131 million. An increase of $28 million in a short time. There were forced to cut dividend & stop the buying back.
If the crude oil price drops below $40 they are going to bleed lot of cash. If it stays there for a while then you may expect another cut in dividend. Most Oil companies should not be paying dividend at the present oil prices.
SGY is one of the few companies that have no issues with line of credit & their debt to cash low ratio is under 2. They have huge line of credit of $425 million. They have a huge unutilized line of credit which allows them to survive these low prices for a long time. There is nothing alarming about SGY debt.
Yesterday banks cut $200m from the line of credit of LTS. Banks are calling in loans of some other oil companies. PLT has already filed for protection & will be liquidated.
If the oil takes another dive so will the share price of all oil stocks including SGY. Considering that there is glut of 3 billion barrels of stockpile the prices are not recovering in the near future.
No point in load up oil stocks yet. There might be a tax loss TRADE only soon.