Markets
TGP

Why Teekay Corporation, California Resources Corp, and Seadrill Partners LLC Were All Crushed This W

The energy industry continues to be pummeled by weak oil prices , which have renewed their slide in recent weeks. This weakness is really starting to spill over into the credit market, making it tougher for energy companies to get funding. These credit worries are weighing down energy stocks that either rely on debt as a key funding source, or have a lot of it on their balance sheet. That was clear by looking closer at the three most beaten down energy stocks this week, which according to S&P Capital IQ data, were Seadrill Partners , California Resources Corp , and Teekay Corporation .

Seadrill Partners plunged earlier this week due to renewed worries that its distribution would be cut. It turned out that those worries were well founded, with Seadrill Partners announcing a 55% distribution cut at the end of the week. With the company growing concerned about its financial flexibility and looming contract renewals, it felt that the cut was the prudent thing to do until the market settles down.

Funding worries were also the driving factor behind Teekay Corporation's decision to dramatically reduce its payout, as well as the payouts for its MLPs Teekay Offshore and Teekay LNG Partners . Teekay took the biggest hit after slashing its distribution 90%, largely because its main source of income are distributions from Teekay Offshore and Teekay LNG Partners, which also announced significant distribution cuts. That said, the company felt this was the prudent move to make considering the current market environment as well as its funding needs.

Finally, California Resources slipped this week amid lower oil prices and the finalization of a bond exchange deal. The company exchanged $2.8 billion of its bonds in a deal that will lower its outstanding principal by more than $500 million. However, investors didn't like that cost, with California Resources' interest expenses rising by more than $20 million as a result of this deal.

To learn more about why these stocks moved so sharply this week, check out the following slideshow.

The next billion-dollar iSecret

The world's biggest tech company forgot to show you something at its recent event, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .

Why Teekay Corporation, California Resources Corp, and Seadrill Partners LLC Were All Crushed This Week from

The article Why Teekay Corporation, California Resources Corp, and Seadrill Partners LLC Were All Crushed This Week originally appeared on Fool.com.

Matt DiLallo has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

Copyright © 1995 - 2015 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

TGP TK

Other Topics

Stocks

Latest Markets Videos

    The Motley Fool

    Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

    Learn More