This week was another reminder of just how cruel the last year has been to oil and gas companies.
On Wednesday, the New York Stock Exchange began proceedings to delist common shares of SandRidge Energy (SD), an Oklahoma-based oil and gas company, citing "abnormally low" trading price levels. In a filing with the Securities and Exchange Commission, Sandridge Energy said it did not plan to contest the NYSE's decision and shares began trading on the Over the Counter Pink market on Thursday. Sandridge's closing price was $0.15 on Wednesday and was down more than 90% over the last year.
Sandridge Energy announced on Friday it was suspending the semi-annual dividend on shares of its 8.5% convertible perpetual preferred stock. In September, the company announced it was suspending the dividend of its 7% convertible perpetual preferred stock in an effort to preserve liquidity.
The company was once favored by Omega Advisors' Leon Cooperman. However, his thinking changed by December 2014 when he said in an interview with CNBC: "If present [oil] prices persisted for several years, SandRidge's survival would be an issue."
Indeed, low oil and gas prices have made it easy to question the survival of a number of oil and gas companies.
In December, Magnum Hunter Resources (MHR), a Texas-based oil and gas company, filed for Chapter 11 bankruptcy protection. At the time of filing, the company proposed a debt-for-equity swap, which had the support of lenders who held nearly 75% of the company's debt. Magnum Hunter said it expects to emerge from the bankruptcy process by April.
On Friday, The Wall Street Journal reported that Magnum Hunter would be requesting final approval on Monday for a $200 million bankruptcy financing package. If approved, the funds would be used to "stabilize the company's operations and satisfy key vendor, employee and other key stakeholder commitments for the duration of the restructuring process," the company said in December.
Even so, the road continues to look rocky for these names.