Below are the three companies in the Oil & Gas Exploration & Production industry with the highest debt to EBITDA ratios. This ratio indicates how many years of EBITDA would be necessary in order to pay back all the debt (assuming Debt and EBITDA are constant). Typically, this ratio is considered to be alarming when it is greater than 3.0 but this can vary and should be looked at within the context of the industry.
GMX Resources (NASDAQ:GMXR) is highest with a debt to EBITDA ratio of 12.1. GMX Resources Inc. acquires and develops oil and gas properties in the United States. The Company currently holds interests in producing and undeveloped properties located primarily in Texas, Louisiana, Kansas, and New Mexico. GMX is concentrating its efforts on the acquisition and development of gas reserves. Thus far today, GMX Resources has traded 86,000 shares, vs. average volume of 505,000 shares per day. The stock has underperformed the Dow (-11.7% to the Dow's -0.3%) and underperformed the S&P 500 (-11.7% to the S&P's -0.3%) during today's trading.
Following is Endeavour International (AMEX:END) with a debt to EBITDA ratio of 10.1.
Finishing up the top three is Quicksilver Resources (NYSE:KWK), with a debt to EBITDA ratio of 8.0.