Questar Corp. wasn't too happy about Standard & Poor's (S&P) decision to downgrade the debt ratings of its regulated subsidiaries, Questar Gas Company and Questar Pipeline, to "A-" and its commercial paper to "A-2." S&P affirmed the BBB+ long-term rating of Questar Market Resources and assigned a stable outlook for each Questar entity. "Our credit ratings remain strong, and we'll keep them strong," said CEO Keith O. Rattie. "No specific event triggered this action. In fact, our credit metrics today are stronger than at any time in the company's history, so we don't expect this action to have a material impact on our borrowing costs or access to credit markets." S&P said that Questar's growing exploration and production (E&P) business benefits Questar Gas and Questar Pipeline when commodity prices are high, but exposes them to greater risk when prices are low. "S&P also cited a negative shift in Utah's regulatory environment as a factor in its decision to downgrade the credit ratings of Questar Gas. But more importantly, S&P affirmed a BBB+ rating for Market Resources, our E&P business and Questar's primary growth driver," Rattie added.
XTO Energy Inc. completed the purchase of Antero Resources, a Barnett Shale producer, for $685 million. The cost included $337.5 million in cash, XTO shares valued at $337.5 million and warrants to purchase another two million XTO shares. XTO also purchased midstream assets, including 80 miles of pipeline, associated compression and processing through the assumption of $175 million in debt. Including additional assumed debt of $43 million, the purchase price totaled $903 million. XTO estimates total proved reserves at 440 Bcf and upside reserves potential of 400 to 500 Bcf. Production from the properties currently totals about 65 MMcf/d. XTO Chairman Bob R. Simpson said, "With 15 XTO rigs now drilling in the play, we plan to increase our Barnett production from 85 MMcf/d to at least 160 MMcf/d in this region by year end 2006." The company also announced that President Steffen E. Palko will retire on April 30 and will no longer serve on the board. XTO promoted Keith A. Hutton, executive vice president of operations, to president. Vaughn O. Vennerberg II, currently executive vice president of administration, was promoted to senior executive vice president and chief of staff and Tim L. Petrus, senior vice president of acquisitions, was promoted to executive vice president of acquisitions. All three promotions will be effective May 1.
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