C&J Energy Services, Ltd. (NYSE:CJES) was recently sent a notice by the New York Stock Exchange (NYSE) for failing to satisfy the continued listing standard deemed necessary by the stock exchange. Per the standard, the company is required to maintain the average closing price of at least $1.00/share over a 30 trading-day period.
The company’s average closing price for the preceding 30 days was 97 cents per share, which led the NYSE to issue a non-compliance standard notice. The notice, however, will neither disrupt the company’s ongoing operations nor will it set off an event of default under its credit facilities.
Per the NYSE rules, the company has now entered a red zone, which can result in the suspension of trading and delisting of the stock if its price does not rise above $1 within six months. In order to maintain its listing, the company has to reply within 10 days of receipt of the NYSE's notice that it will strive to cure the deficiency.
C&J Energy plans to notify the NYSE that it will improve its condition. The company intends to utilize all available options to regain compliance with the minimum share price criteria.
Though all crude-focused stocks have been hurt by the free fall in commodity prices, the companies in the exploration and production (E&P) sector have been the worst hit. These companies have been able to extract less value for their products, which in turn, has badly affected oilfield services providing companies like C&J Energy.
In the first quarter of 2016, the company saw its revenues decrease by around 33% year over year and saw its debt increase to about $1.3 billion. This has put immense pressure on the company in terms of serving its upcoming debt maturities and interest payments.
The Bermuda-based company provides completion and production services for the oil and gas industry, primarily in North America. The company provides well construction, well completions, well support, and other oilfield services to oil and gas E&P companies.
Currently, C&J Energy carries a Zacks Rank #3 (Hold).
Some better-ranked players from the broader energy sector are Braskem S.A. (NYSE:BAK) , Murphy USA Inc. (NYSE:MUSA) and EP Energy Corporation (NYSE:EPE) . All these stocks sport a Zacks Rank #1 (Strong Buy).
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MURPHY USA INC (MUSA): Free Stock Analysis Report
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C&J ENERGY SVCS (CJES): Free Stock Analysis Report
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