S&P: Energy Partners capital budget neutral for credit

Standard & Poor's said Wednesday that Energy Partners Ltd.'s (B+/stable/--) recent announcement that it set its 2004 capital budget at $125 million, or 14% above 2003 levels, is neutral for credit quality.

Capital spending is expected to be limited to internal cash flow, which is supported by commodity hedges on about 20% of 2004 anticipated production.

S&P's ratings also incorporate expectations that Energy Partners will pursue sizable property purchases in addition to its capital budget. Acquisitions are likely to be funded from the company's cash balances ($90 million of cash on hand as of Sept. 30).

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