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Moody's: Magnum Hunter view negative
Moody's Investors Service said it changed Magnum Hunter Resources Corp.'s rating outlook to negative from stable and downgraded the company's speculative grade liquidity rating to SGL-4 from SGL-3.
At the same time Moody's affirmed Magnum Hunter's B3 corporate family rating, B3-PD probability of default rating and Caa1 senior unsecured note rating.
"The negative outlook reflects the audit challenges around financial reporting and the execution risk surrounding drilling and production ramp up in the Marcellus Shale and the Williston Basin properties," Moody's analyst Sajjad Alam said in a news release.
"MHR will need to replace and grow reserves and production from a reduced asset base following the sale of its core Eagle Ford acreage for $401 million. The company will also need to dedicate significant people resources in completing its annual audit with a new independent auditor (BDO USA, LLC) and strengthen oversight functions and internal controls over financial reporting," Alam added in the release.
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