S&P affirms KCS Energy

Standard & Poor's said it affirmed its B corporate credit rating and B- senior unsecured debt rating on KCS Energy Inc. following the announcement that KCS plans to purchase properties located in North Louisiana and East Texas region for about $95 million. The outlook is stable.

S&P said the rating affirmation incorporates the company's improved operational results and financial profile during fiscal 2004, which allowed the company to make the proposed all debt-financed acquisition while also maintaining financial measures appropriate for its current ratings.

Furthermore, the stable outlook reflects S&P's expectations that KCS will prudently manage its aggressive growth spending of about $190 million in 2005 primarily with cash flow generation and minimal bank debt borrowings.

Additional borrowing, if any, should be minimal and is not expected to further impede on the company's liquidity and financial profile.

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