Moody's takes Offshore Logistics off negative watch

Moody's Investors Service said it confirmed Offshore Logistics Inc.'s Ba2 corporate family rating and Ba2 $230 million senior unsecured notes due 2013 and removed them from review for possible downgrade following the company's filing of its 10-K report for the fiscal year ended March 31, 2005, along with the delayed 10-Q reports for the first two fiscal quarters for year 2006.

However, the outlook remains negative pending resolution of the ongoing SEC investigation related to Foreign Corrupt Practice Act matters that resulted in the prior year financial restatements, a separate Department of Justice investigation related to antitrust issues in the Gulf of Mexico and the disclosure of company-level material weaknesses in internal controls, the agency said.

The ratings reflects the company's solid credit metrics, the favorable outlook for the company's business given the continued strength in the exploration and production sector, historically conservative financial policies. the geographic diversification of its operations, its leading position in its primary markets and the company's solid liquidity position.

Moody's said the ratings remain restrained by the company's dependence on the volatile exploration and production of oil and gas, the still mature and potentially cyclical nature of the Gulf of Mexico and North Sea, the ability of the major oil and gas companies to foster greater competition for helicopter services and the significant capital being spent on the company's fleet renewal and expansion over the next couple of years.

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