Fitch gives BB to DEA Deutsche Erdoel, notes

Fitch Ratings said it assigned DEA Deutsche Erdoel AG a senior unsecured rating of BB.

The agency also assigned DEA Finance SA's proposed senior unsecured notes an expected rating of BB(EXP).

The notes are guaranteed by DEA and its key subsidiaries accounting for 99% of 2015 EBITDAX and 100% of fixed assets at end-2015. The proceeds from the offering are expected to be used to partially repay amounts outstanding under a reserve-based lending facility.

Fitch said the ratings are supported by a diversified asset base in AAA-rated countries (mainly Germany and Norway), low cost of production and a clearly stated financial policy with net debt-to-EBITDAX capped at around 2 times to 2.5 times.

DEA's credit profile is constrained by mature assets in Europe, where production decline is yet to be arrested, and size of production.

The agency said it deconsolidates oil and gas output from the West Nile Delta (WND) reservoir in Egypt from DEA's financial profile because the company plans to project-finance its stake.

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