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McMoRan Exploration Ranks the Highest in Terms of Debt to EBITDA Ratio in the Oil & Gas Exploration & Production Industry (MMR, GMXR, END)

Published on Tue, 01/22/2013 - 11:21
By Peter Chu

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.

McMoRan Exploration (NYSE:MMR) is highest with a debt to EBITDA ratio of 13.8. McMoRan Exploration Co. explores for and produces oil and gas offshore in the Gulf of Mexico and onshore in the Gulf Coast area. Thus far today, McMoRan Exploration has traded 221,000 shares, vs. average volume of 7.2 million shares per day. The stock has underperformed the Dow (-0.3% to the Dow's 0.0%) and underperformed the S&P 500 (-0.3% to the S&P's -0.2%) during today's trading.

GMX Resources (NASDAQ:GMXR) is next with a debt to EBITDA ratio of 12.1.

Finishing up the top three is Endeavour International (AMEX:END), with a debt to EBITDA ratio of 10.1.

By Peter Chu