Sabine Oil & Gas Corp (OTCMKTS:SOGC) has been awarded more time to pay its loans having entered into a forbearance agreement with its lenders. For weeks, the company has been trying to avoid a default having tapped into the 30-day grace period with the lenders. The stock is down by 95% for the past 12 months as financial concerns continue to grow.
Street Concerns
Failure to make an interest payment last month saw the stock plummet even further as the Street remains concerned that the company’s problems might be worse than initially thought. Sabine Oil & Gas Corp (OTCMKTS:SOGC) has now until June 30 to meet its financial obligation having been successful in holding off some lenders led by Wilmington Savings Fund.
Lenders had reportedly been considering whether to cut what Sabine Oil & Gas Corp (OTCMKTS:SOGC) can borrow from its revolving credit facility a move that could strain the company even further financially.
Cash Constraints
Over the next 30 days, the oil and gas company will have to find a way to tighten some of the covenants under the credit facility. Creditors had sued the company in February alleging they were barred from $584 million when a merger between Sabine Oil & Gas Corp (OTCMKTS:SOGC) and Forest Oil Corp was restructured. Prospects in the energy metal and mining industry continue to decline as Fitch Ratings affirm that energy, metal and mining industry may account for 77% of the total defaults on junk bonds.
Sabine Oil & Gas Corp (OTCMKTS:SOGC) now has nearly $2 billion in net debt and maintains that the $276.9 million in cash it currently controls is enough to support its ongoing oil field operations. The company is also reportedly considering the possibility of selling some of its assets to meet some of its financial obligation or restructure its debt altogether.
