Moody's may lower Whiting

Moody's Investors Service said it placed Whiting Petroleum's ratings on review for downgrade upon its most recent debt funded acquisition, pending Whiting's review of its near-term funding plan.

Ratings under review for downgrade include Whiting's B2 rated $150 million of eight-year senior subordinated guaranteed notes, Ba3 senior implied rating, and B1 senior unsecured issuer rating.

The $345 million purchase of 41.9 million barrels of oil equivalent of oil and gas reserves (60% proven developed, or PD) in 17 fields in the Permian Basin will, at least initially, be funded with bank debt. This sharply escalates leverage. Whiting had already completed three smaller all-debt funded acquisitions, totaling $98.5 million, since June 30 and would need to complete a substantial common equity offering before the end of the rating review to retain its ratings.

If downgraded, the ratings would be reduced by one rating notch, Moody's said.

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