While the fortunes of Atlas Energy are soaring, the outlook for another oil and gas sponsor, NGAS, is murkier. NGAS reported disappointing earnings yesterday, said it was in violation of debt covenants and that it is:
evaluating all of its strategic alternatives and that it is actively pursuing possible transactions that may include the sale of the company or of some, or all of, the company's assets.NGAS stock dropped 40% today and closed at $.36 per share. NGAS has $170 million of oil and gas profits on its balance sheet, but it does not have the cash to repay the up to $57 million of debt that is now due under covenant violation. NGAS says it will keep drilling despite the financial worries.