S&P: Westport ratings unaffected by acquisition

Standard & Poor's said independent oil and gas exploration and production company Westport Resources Corp.'s (BB/Stable/--) acquisition of 211 billion cubic feet equivalent of primarily natural gas properties in south Texas for about $350 million will not affect Westport's credit ratings and outlook.

The acquired properties have competitive production and finding costs that should help Westport begin to lower its very high cost structure. S&P had expected Westport to make competitive acquisitions to help offset its high drilling costs.

S&P also is not changing its ratings or outlook as Westport had flexibility in its financial profile for additional acquisitions. At the time of the acquisition, Westport had cash balances of about $120 million. In addition, borrowings to fund the acquisition should be repaid through free cash flows (supported by price hedges) during 2004.

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