Low oil and gas prices’ are making made it harder for energy companies to raise cash for Louisiana projects, and commodities’ ripple effect has even contributed to the problems of a wood pellet plant in LaSalle Parish.
Bond prices of energy producers in north Louisiana and the Gulf of Mexico have dipped to “distressed levels,” according to The Wall Street Journal. Meanwhile, those in west Texas and Canada have held up best.
Goodrich Petroleum Corp. bet on the Tuscaloosa Marine Shale, an oil-rich formation that covers the middle of Louisiana. The company’s bonds are trading at around a penny on the dollar and its shares at around 8 cents.
Meanwhile, Louisiana Pellets in Urania and its parent company, German Pellets, have asked U.S. and German courts for protection from creditors while they reorganize. The pellets are burned by power plants to make carbon-neutral electricity.
The Louisiana plant ran into construction setbacks, while German Pellets was hurt by falling energy prices, according to Bloomberg News. The Louisiana Public Facility Authority approved issuing up to $300 million in bonds to finance the plant, but the plant couldn’t make interest payments on some of the bonds in January.