Research Update: Whiting Petroleum's 'B+' Corp. Rating Is Placed On Watch Neg Re: Reserves Purchase Jul 05
Standard & Poors, July 2005
Abstract
On July 28, 2005, Standard & Poor's Ratings Services placed its 'B+' corporate credit rating on Whiting Petroleum Corp. on CreditWatch with negative implications. The rating action follows the announcement that Whiting intends to purchase 734 billion cubic feet equivalent of proved reserves from Celero Energy LP for roughly $802 million, $785 million to be funded with borrowings from an expanded credit facility. Although the acquisition price appears very reasonable at $1.09 per thousand cubic feet equivalent (mcfe), Whiting's debt leverage will increase to more than $4 per barrel of oil equivalent, as well as boosting debt as a percent of total capital to more than 60%, both of which are aggressive for the current rating. In addition, the large...
Companies mentioned in this report are: Whiting Petroleum Corp.
Action: On CreditWatch:Negative
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.
Product Type: Research Update
Research updates complement media releases. They offer more depth and detail than summary analyses by incorporating all information published in the media release. They are more up to date than summaries in that they are published simultaneously with media releases.
Whiting Petroleum Corp.
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