[Zhang Fei]

Energy XXI managed to sell $1.25 billion in second-lien notes at 12%. In doing so they subordinated their existing $750 million in senior notes. Those notes were trading at a yield of less than 2% last April; now they yield 26% (according to Finra’s TRACE site). Juicy, huh? Only if EXXI survives. Its shares are down 85% from last June, when it paid $2.3 billion to acquire rival EPL Oil & Gas at the peak of the market. Without higher oil prices there’s little chance the company will be able to generate any profits from its vast collection of mature oil fields in the shallow waters of the Gulf of Mexico.

What's interesting about this company is that it chose to borrow more money instead of issuing stock, despite its massive debt load relative to stockholder equity even before the new debt issue. Some of these natural resource CEO's are like degenerate gamblers.

[thackney]

What's interesting about this company is that it chose to borrow more money instead of issuing stock, despite its massive debt load relative to stockholder equity even before the new debt issue.

I would expect few wanted to buy more stock in a company so loaded up with debt. Some of these firms have more liabilities than assets at the current oil price.