S&P cuts Western Oil Sands outlook to stable

Standard & Poor's said it revised its outlook on Western Oil Sands Inc. to stable from positive and affirmed its BB+ long-term corporate credit rating.

At the same time, the agency said it assigned a recovery rating of 1 to the company's $450 million notes due 2012, indicating a high expectation of recovery in principal in the event of payment default.

S&P said it also raised its senior secured debt rating on the company's $450 million notes to BBB-, given its expectation for full recovery of principal.

S&P added that the ratings on Western Oil Sands reflect the company's 20% ownership interest in the Athabasca Oil Sands Project and the above-average exploration and production characteristics of the oil sands mining and upgrading operations, specifically its above-average reserve life index of about 27 years on the base project, a competitive cost profile compared with conventional upstream full cycle costs and nondeclining production profile.

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