Oil Prices Crushed These 5 Oil Stocks This Week

The plunging price of crude crushed oil stocks again this week. After some initial enthusiasm, crude fell from $38 at the start of the week to just over $33 per barrel by Friday. That led

to another awful showing for oil stocks. Some of the worst performers, according to S&P Capital IQ data, were Clayton

Williams Energy (NYSE: CWEI), Enable Midstream Partners (NYSE: ENBL), Hornbeck Offshore

Services (NYSE: HOS), Carrizo Oil & Gas (NASDAQ: CRZO), and Cobalt International (NYSE: CIE). 

What:Clayton Williams Energy (NYSE: CWEI) slipped more than 16% this week.

So What: Key driver: The continued

crash of crude oil With the price of oil now

below $35 per barrel, it is significantly reducing the economic drilling inventory of Clayton Williams

Now What: The weak oil price is also

cutting deeply into its cash flow, which will make it harder to maintain its debt

Key takeaway: Investors worry that Clayton Williams won’t survive if crude continues to crash

What:Enable Midstream Partners (NYSE: ENBL) slumped 20% this week.

So What: Key driver: Growing

concerns with its direct commodity price exposure

Every 10% decrease in the price of natural gas yields a $5 million decrease in its Adjusted EBITDA for 2016

Now What: Meanwhile, a 10% decrease in

NGL and condensate prices would yield a $3 million decrease in Adjusted EBITDA in 2016

Key takeaway: With its distribution coverage ratio already tight, investors are worried that falling commodity prices mean a distribution cut is on the horizon

What:Hornbeck Offshore Services (NYSE: HOS) dropped 20% this week.

So What: Key driver: The continued

crash of crude With oil now falling below

$35 per barrel, it makes it much less likely that new oil projects in the Gulf of Mexico will be given the green light

Now What: This will force the

company to continue to stack vessels, cutting its margins and leading to lower cash flow

Key takeaway: Investors are growing concerned that operating conditions could get much worse

What:Carrizo Oil & Gas (NASDAQ: CRZO) slumped more than 21% this week.

So What: Key driver: The continued

crash of crude oil With oil now down below $35

per barrel, it is further reducing Carizzo’s economic drilling locations, which is a concern given that only 55% of its drilling locations were economic at an oil price below $45 per barrel

Now What: On a more positive note, FBR

Capital recommended the stock and two peers this week because of its staying power, margin stability, and strong management

Key takeaway: Investors are more concerned that Carrizo’s economic drilling inventory is slipping away with each drop in the price of crude

What:Cobalt International (NYSE: CIE) fell more than 21% this week.

So What: Key driver: The continued

crash of crude Unlike most oil companies,

Cobalt doesn’t currently produce any oil and won’t start producing until the Heidelberg project comes online next quarter

Now What: However, the slide in crude

will make that, and other projects in development, less profitable than expected

Key takeaway: Investors are revaluing the company’s future potential given crude’s persistent slide

This could be the next billion-dollar iSecret