Moody's lowers Compton Petroleum

Moody's Investors Service said it downgraded Compton Petroleum Corp.'s corporate family and probability-of-default ratings to B2 from B1 and Compton Petroleum Finance Corp.'s senior unsecured bonds to B3 (LGD5) from B2. The loss-given-default rate on the notes was upgraded slightly to 73% from 75%.

The outlook was changed to negative from developing.

Compton recently terminated the process it began in July to find a buyer for all of its outstanding common shares, citing difficult financial and credit market conditions, Moody's noted.

The agency said the downgrade and outlook change reflect Compton's reduced production base; continued high capital expenditures necessary to sustain current production levels, which deprives the company from producing free cash flow even during periods of robust natural gas prices; uncertainty associated with the strategic direction of the company; and a weakened operating cost profile.

The rating is supported by the company's reserve base and significant direct control of both reserves and gas processing infrastructure, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.