Which Shale Producer Will See Its Target Price Cut to Zero Next?

Dan Dicker, Energy contributor at thestreet.com, talks with Jill Malandrino of OptionsProfits about the continuing distress in US shale oil producers. With SandRidge energy predicted to go bankrupt by KLR group, Dicker lays out the characteristics of oil companies that are likely to follow. They include a core area of production that is uneconomic at $50 oil and tremendous leverage in super high-yield bonds. Access to fresh capital is going to be the difference in who survives and who doesn't, and leverage and flexibility will count more than ever. As storage starts to run out, Dicker explains assets are going to start going on fire sale, shaking out the weaker players. A clue to determining who may be next is to look at the bond numbers as they give an indication of the seriousness of the default risk, like Halcon, American Eagle Energy or Emerald Oil.