S&P: Pan American Energy on positive watch

Standard & Poor's said it placed the ratings on Pan American Energy LLC (PAE) on CreditWatch with positive implications, following its raising of the ratings on the Republic of Argentina to B from B-.

While the upgrade on the sovereign rating on Argentina reflects the agency's perception of a lower default risk for the country, it does not necessarily imply a more favorable business environment for private entities operating in Argentina.

S&P said it is currently performing a detailed analysis of how the improved macroeconomic and fiscal environment affects these entities' credit quality, adding that the ratings on PAE reflect its heavy concentration in Argentina, exposing the company to the risks of operating under a highly uncertain and rapidly changing economic and regulatory environment, as well as a significant need for capital expenditures to develop its large reserve base.

The ratings also reflect the company's relatively large reserve base, low operating costs, outstanding credit measures and a very sound financial profile, the agency added.

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