TEXT-S&P issues report on oil and gas cos Q4 ratings

www.forbes.com Reuters, 01.30.03, 2:33 PM (The following statement was released by the rating agency)

NEW YORK, Jan 30 - The fourth quarter continued to be a time for reflection and planning, as continued strength in oil and natural gas prices failed to create much ratings activity, according to a report published today by Standard & Poor's Ratings Services.

For refiners, the fourth quarter offered a little reprieve from an otherwise forgettable year, as margins improved in December due to a drop in distillate inventories--especially gasoline--and the prospect for further tightening as refineries in Venezuela were closed. (But, the improvement vanished in January.)

"Companies in the service sector, aside from seismic services and a couple of other exceptions, continued to successfully weather the decline in drilling activity, while many of the larger exploration and production companies seem to be maintaining conservative capital budgets despite the strength of commodity prices," said Standard & Poor's credit analyst Paul Harvey.

This position begs important questions regarding the depth and quality of the industry's North American natural gas prospect inventory and the potential for a sustained bout of above-normal prices. The majority of rating actions resulted from the failure of companies to improve or maintain adequate capital structures for their rating.

The report, titled "Fourth-Quarter 2002 Global Oil & Gas Ratings Round-Up," is available on RatingsDirect, Standard & Poor's Web-based credit research and analysis system. Members of the media may obtain copies of the full report by contacting Gregg Stein at (1) 212-438-1730 or by E-mail at gregg_stein@standardandpoors.com.

Standard & Poor's will be hosting a seminar titled "Determining Corporate Credit Quality in a Volatile Environment," on Feb. 2-4, 2003, at the Grand Floridian Resort & Spa, Orlando, Fla. Standard & Poor's senior analysts and invited industry leaders from the corporate, banking, and investment communities will discuss trends and current issues related to corporate credit quality. For complete seminar details and registration, please call (1) 212-438-2800, or visit www.standardandpoors.com/events/CRS. You may also send an E-mail to seminars@standardandpoors.com.