Blackstone Group LP’s distressed credit unit is backing away from investments in the most troubled energy companies based on its expectation that oil prices are due for a renewed decline.

“We now prefer performing assets,” said Patrick Fleury, managing director at GSO Capital Partners LP, at the Debtwire Investors Summit on Wednesday.

“The focus is on stressed, not distressed, oil and gas companies in good areas,” Fleury told Bloomberg News after the panel discussion.

Fleury said “performing assets” are those with sufficiently high quality and low costs to be worth holding if energy prices decline. He identified the Bakken region of North Dakota, Eagle Ford in south Texas and the Permian Basin in West Texas and New Mexico as among the areas in which the company currently is interested, he added.

The shift in investment strategy was a departure from its plan earlier in the year to invest more than $10 billion in the industry after the price of oil plunged.

GSO in January committed as much as $500 million to fund oil and gas development for Linn Energy LLC for an 85 percent working interest in the wells. Blackstone, the biggest alternative-asset manager also accelerated plans to raise capital to augment the existing large energy business at GSO.

Many junk-rated energy companies, which suffered as the commodity’s price dropped as much as 59 percent after peaking in June, have been able to raise capital since then, allowing them to keep drilling as they seek to ride out of the oil slump.

Halcon Resources Corp., Energy XXI Ltd. and Goodrich Petroleum Corp. are among borrowers leading almost $10 billion of second-lien bond offerings in the U.S. this year.

“There were a lot more distressed energy opportunities in the fourth quarter and the first quarter. These are nowhere to be found now,” Fleury said.

“Now I rather own paper that’s paying me 7 percent on a quality asset than buy debt on a company that has bad assets and high cost structure even though they will pay double-digits in coupon,” said Fleury.

Oil traded at $59.50 a barrel at 1:19 p.m. on the New York Mercantile Exchange, down 45 percent from the June high.