Rating

Looking to shore-up investor support and appease credit rating agencies, El Paso Corp. last week reiterated its restructuring commitment, along with its mission of focusing on its global liquefied natural gas (LNG) and petroleum business (see NGI, June 3).

Looking to calm investor and credit rating agency jitters about energy trading operations, Aquila, Inc. on Friday said that it estimates that 70% of its 2002 operating earnings and 75% of its 2003 operating earnings will come from the more traditional side of its business mix. The company also said it intends to maintain its dividend at $1.20 per share.

If Houston-based Enron Corp., the acknowledged largest energy trader in the world, had a wish list of things it might want to add to its bartering bag, it might be to trade in this entire year. So far, the news seems to have gone from bad to worse, with business deals gone sour, the CEO abruptly departing last summer, the first quarterly loss in more than four years, rumors of shady business deals, and as of Friday, a plunging stock price that seems to find no floor.

Friedman, Billings, Ramsey & Co. Inc. initiated coverage ofHS Resources with a “buy” rating and a 12-month price target of $30based on expectations for strong summer gas prices. In a 16-pageresearch report, FBR senior research analyst David Khani identifiedHS as the dominant oil and gas producer in the Denver-Julesberg(D-J) Basin.

Things are looking up, at least a little, for offshore rigutilization, according to Duff & Phelps Credit Rating Co.(DCR). The firm says operating rates have increased steadily overthe past 12 months as drilling day rates for a shallow waterjack-up rig have risen from a low of $22,000 to current levels ofaround $50,000. Offshore rig utilization has also steadilyincreased from a low of 72% during the summer of 1999, to 81% inFebruary 2000. Oil prices are averaging better than $20/barrel andOPEC countries continue to adhere to new, reduced productionquotas, resulting in lower reported crude oil supplies. Also,according to Oil & Gas Journal, natural gas energy consumptionis projected to increase 8.4 % by 2002.

Duff & Phelps Credit Rating Co. has assigned ratings tosecurities issued by Kelvin Ltd. (Kelvin) that represent thefirst-ever securitization through the capital markets of aportfolio of weather-related risks aggregated by Koch EnergyTrading.

Columbia Energy Group received high marks from Fitch IBCA, theinternational debt rating agency, for significant progress sinceemerging from bankruptcy in 1995. “Columbia exhibits a stablefinancial profile and favorable qualitative operatingcharacteristics,” Fitch said in upgrading the company’s $2 billionoutstanding debentures two notches to A from BBB+ and raising its$850 million commercial paper program F1 from F2.