Moody's upgrades Anton Oilfield

Moody's Investors Service said it upgraded Anton Oilfield Services Group's corporate family and senior unsecured ratings to B1 from B2.

The outlook is stable.

The upgrades reflect an expectation that the company will be able to maintain its improved credit profile over the next 12- to 18-months, supported by higher earnings from a steady operating environment, an enhanced cost structure and prudent capital spending, Moody's said.

The improved operating environment is the result of increased capital spending by upstream oil and gas companies, the agency said, and increased natural gas and shale gas production activities in China.

The ratings also are underpinned by the government's target to increase natural gas in its primary energy mix, Moody's said.

The agency said it expects Anton's adjusted debt-to-EBITDA ratio to improve to 2.5x to 3x over the next two years, from 3.6x for the year that ended June 2018.

The ratings are supported by higher earnings from revenue growth and improved cost efficiencies, along with the limited increase in debt driven by more prudent capital spending and working capital cycle management.

The positive factors provide the company with a buffer against potential oil price volatility and its high short-term working capital needs, Moody's said.

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