S&P lowers Stone Energy

Standard & Poor's said it lowered its corporate credit rating on Stone Energy Corp. to BB- from BB and placed the rating on CreditWatch with negative implications. S&P also lowered the senior unsecured debt rating to BB- from BB and the subordinated debt rating to B from B+.

S&P said the rating actions follow the company's Oct. 6 announcement that it would have a negative reserve revision of about 161 billion cubic feet equivalent, representing about 20% of year-end 2004 reserves. The revision was in conjunction with an internal reserve review of its U.S. Gulf of Mexico properties that included the use of an independent third-party engineering firm.

In addition, the rating actions also incorporate S&P's longer-term concerns regarding escalating finding and development costs in the company's core areas of operations, a significant concentration of production and oil and gas assets in the U.S. Gulf of Mexico, and creeping debt leverage over the past 18 months in conjunction with acquisition activity.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.