S&P ups Encore Acquisition view to stable

Standard & Poor's said it affirmed its BB- corporate credit rating on Encore Acquisition Co. and revised its outlook on the company to stable from negative.

S&P said the outlook revision to stable incorporates Encore's successful integration of its debt-financed acquisitions in early 2004, combined with its increased production, strong reserve replacement, and solid cash flow generation during fiscal 2004. In addition, the company's credit protection measures, leverage, and liquidity are consistent with the current ratings and other similarly rated small exploration and production companies.

Furthermore, S&P expects Encore to fund its sizable $223 million capital expenditures plans in 2005 primarily with internal cash flow and modest additional bank borrowings, which should not materially impede the company's financial profile.

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