now opening club sugarkane, page-45

more from saf


agentm,
Also a more comprehensive note from Mooodys which confirms the very solid naure of Hilcorp?s debt. Seems to be a very well run company with a Houston billionaire at the helm.



http://www.bondweb.co.kr/menu01/sub04/prime_content.asp?idx=6122142&page=1&pageIdx=&pageDirection=&gubun1=0&gubun2=Dow%20Jones&keyword=

The following is a press release from Moody＇s Investors Service:


Approximately $992 million of Rated Debt Affected


New York, February 03, 2010 -- Moody＇s Investors Service assigned a B2 rating to Hilcorp Energy I, L.P.＇s (Hilcorp) proposed $300 million senior unsecured notes due 2020. Moody＇s also affirmed Hilcorp＇s B1 Corporate Family Rating (CFR) and the B2 rating on the company＇s existing senior unsecured notes. The outlook is stable.

"This bond offering refinances outstanding revolver borrowings and provides additional cash to fund planned acquisitions and development,"
commented Francis Messina, Moody＇s Vice President. "While this will increase Hilcorp＇s debt level, Hilcorp entered 2010 with low leverage metrics relative to similarly rated peers."

Pro forma for the notes offering, Moody＇s estimates Hilcorp＇s adjusted Debt/PD at approximately $10/Boe and debt plus future FAS 69 proven reserve development capex on total proven reserves at approximately $13.50/Boe. However, in terms of debt to average daily production Hilcorp carries less leverage compared to its peers estimated less than $22,000/Boe. Moody＇s estimates that Hilcorp will reduce further its adjusted debt/PD level below $10/boe as the company rationalizes its reserve portfolio.

Hilcorp＇s B1 CFR reflects strong production growth trends from investments, comparatively stable production and a long generally productive history in most of its focus regions, and an expected reduction in financial leverage as earnings continue to grow. Though Hilcorp has an aggressive acquisition strategy the company has indicated it will appropriately contain leverage.

Hilcorp has had a successful track record for replacing production through its acquire and exploit strategy of purchasing mature properties from the majors then adding reserves through the drillbit, with an estimated 14% compounded annual growth rate from year-end 2002 projected into 2010. The relatively low three-year drillbit costs of estimated at approximately $15.73/boe underlines Hilcorp＇s solid exploitation reserve replacement trend and also reflects management＇s strong operational expertise. Hilcorp operates 93% of its net production.

The stable outlook is based on an expectation that Hilcorp funds its capital expenditures at levels largely in line with its operating cash flows while achieving its production growth targets. The outlook could be changed to negative if spending were to materially exceed operating cash flow. The outlook could also be pressured or the ratings downgraded if the company were to significantly increase debt through further property acquisitions, dividends, and/or outspend its operating cash flows.
Dividends for year-end 2008 were approximately $100 million, with an estimated dividend of $75 million for 2009.

The ratings for the senior unsecured notes reflect both the overall probability of default of the company, to which Moody＇s assigns a PDR of B1, and a loss given default of LGD 4, 62%, previously LGD 4, 66%. The B2 rating of the senior unsecured notes reflects their position in Hilcorp＇s capital structure, including the subordination to all first lien senior secured creditors and full guarantees of existing and future subsidiaries.

The last rating action was on November 13, 2009 when Moody＇s upgraded Hilcorp＇s CFR to B1 from B2, and upgrade its senior unsecured notes to B2 from B3.

The principal methodology used in rating Hilcorp was Moody＇s Global Independent Exploration and Production Industry rating methodology published in December 2008. The methodology is available on www.moodys.com in the Rating Methodologies sub-directory under the Research & Ratings tab. Other methodologies and factors that may have
been considered in the process of rating this issuer can also be found in the Rating Methodologies sub-directory on Moody＇s website.

Hilcorp is a private limited partnership engaged in onshore and coastal oil and gas production, acquisitions, exploitation, and divestitures.
Hilcorp acquires properties late in their productive lives with a goal of boosting production through recompletions, workover and repair of downhole hardware, restimulation of the wellbore/reservoir interface, and refracturing of reservoir rock.