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Apache Corp. Joins the Billion Dollar Club Jan 03
Standard & Poors, Jan 2003
Abstract
Oil and gas company Apache Corp. recently joined the ranks of large independents pursuing billion-dollar growth opportunities. On Jan. 13, 2003, the company announced that it entered into a definitive agreement to purchase U.K. and U.S. oil and gas properties from BP PLC for $1.3 billion, plus the assumption of $100 million of associated plugging and abandonment liabilities. In contrast to the ratings of peers that were downgraded when they acquired companies in largely debt-financed transactions (see table), the ratings of Apache were affirmed because: Apache's debt leverage remains consistent with an 'A-' rating. Apache's total debt to total capital likely will peak at about 39%, although Standard & Poor's believes that the company will reduce debt leverage to near...
Companies mentioned in this report are: Hess Corp.,BP PLC,ConocoPhillips Holding Co.,Kerr-McGee Corp.,ConocoPhillips Co.,Apache Corp.,Tosco Corp.,Mitchell Energy & Development Corp.,Gulf Canada Resources Ltd.,Burlington Resources Inc.,Triton Energy Ltd.,Devon Energy Corp.,Anderson Exploration Ltd.
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.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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