Jones Energy, Inc., an oil and gas E&P company, maintains wells and undeveloped acreage located in Anadarko and Arkoma basins. Currently it maintains a FRISK® score of “1,” CreditRiskMonitor’s worst category in terms of bankruptcy risk. Even with significant proven reserves and relatively higher commodity prices, steep spending and financial leverage are increasing this company’s financial stress.
This High Risk Report will illustrate important high risk factors regarding Jones Energy. We make comparisons to industry peers and relative to historical results. Despite recently obtaining secured debt funding, the company’s interest coverage ratio and free cash flow remain persistently weak. Counterparties should watch this company closely in the coming quarters for material developments.
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Our FRISK® score model incorporates four powerful risk inputs:
- “Merton”-type model of stock market capitalization and volatility
- Financial ratios, including those used in the Altman Z”-Score Model
- Bond agency ratings from Fitch, Moody's, and DBRS Morningstar
- Website click pattern data from CreditRiskMonitor® subscribers, representing key credit decision-makers at nearly 40% of current Fortune 1000 companies plus thousands of other large companies worldwide
Since the start of 2017, the FRISK® score’s rate of success in capturing public company bankruptcy is 96%. In any given year, you can count on one hand the times we miss – and in those outlier cases, the circumstances deal with unusual, unforeseen events such as natural disasters and CEO fraud.
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About High Risk Reports
Our High Risk Reports feature companies that are exhibiting a significantly high level of financial distress, as indicated by our proprietary FRISK® score.
The reports highlight the factors that have pushed a company's score lower on the "1" (worst) to "10" (best) FRISK® score, which is 96% accurate in predicting bankruptcy over a 12-month period. The High Risk Reports also includes analysis on financial indicators such as the company’s DBT index, stock performance, financial ratios and how it is performing relative to its industry peers.
The ultimate goal of the High Risk Report series is two-part: provide an early warning for those doing business with an increasingly distressed company and inform of the many signals that should be examined when assessing financial risks.