Summary: Chaparral Energy Inc. Aug 09
Standard & Poors, August 2009
Abstract
The ratings on Oklahoma City, Okla.-based Chaparral Energy Inc. reflect near-term concerns about its limited liquidity, potential for covenant violations, and a lack of flexibility in its capital structure brought on by its very high debt leverage. Additionally, ratings incorporate Chaparral's aggressive growth strategy, elevated cost structure, and modest production levels, which are only partially mitigated by the company's long reserve life, high operatorship of its properties, and extensive hedging program. The company's financial risk profile is highly leveraged. High debt leverage of around $11 per barrel of oil equivalent and debt to EBITDA exceeding 5x reflect management's aggressive drilling program and acquisitions that have consistently exceeded cash flows. Additionally, low operating cash flows are reflected in weak EBITDA coverage...
Companies mentioned in this report are:
- Chaparral Energy Inc.
- KCS Energy Inc.
- GE Capital Corp.
- EPL Oil & Gas Inc.
- Whiting Petroleum Corp.
- Delta Petroleum Corp. (Unsolicited Ratings)
- Clayton Williams Energy Inc.
- Petrohawk Energy Corp.
Action: Review
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
This product consists of a Summary Analysis: Bi-annual (at least). An abbreviated analysis containing Standard & Poor's issuer credit ratings as of the time the article was published. The analysis includes a rating rationale - the basis on which the rating was assigned - and an outlook section if the issuer is not on CreditWatch. Financial statistics are not included.
- Chaparral Energy Inc.
- KCS Energy Inc.
- GE Capital Corp.
- EPL Oil & Gas Inc.
- Whiting Petroleum Corp.
- Delta Petroleum Corp. (Unsolicited Ratings)
- Clayton Williams Energy Inc.
- Petrohawk Energy Corp.
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