Moody's downgrades Nostrum Oil

Moody's Investors Service said it downgraded Nostrum Oil & Gas plc's corporate family rating to B3 from B2 and probability of default rating to B3-PD from B2-PD.

Moody's also said it downgraded the senior unsecured ratings to B3 from B2 on the notes issued by Nostrum's wholly owned subsidiary, Nostrum Oil & Gas Finance BV.

The outlook is stable.

The downgrades were based on an expectation that the company's financial metrics will weaken in 2019 under $60 per barrel oil price scenario due to low hydrocarbons production, the agency said.

This is unless appraisal drilling in the Northern part of the Chinarevskoye field yields material positive results, Moody's said.

The ratings are constrained by relatively modest scale of the company's operations by international standards, high operational concentration and fairly sizable capital spending, the agency said.

The rating also reflects fairly high oil prices, beneficial geographic positioning and access to infrastructure, Moody's said.

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