S&P assigns BB+ to WPX revolver

Standard & Poor's said it assigned its BB+ issue-level rating (same as the corporate credit rating) to the $1.5 billion unsecured revolving credit facility due 2019 WPX Energy Inc.

The recovery rating on this debt is 3, indicating an expectation of meaningful (50% to 70%) recovery if a payment default occurs.

The agency views WPX's business risk profile as "fair" and its financial risk profile as "intermediate."

The ratings incorporate the company's midsize proved reserve base and production profile, and its below-average profitability relative to peers given its natural gas-focused asset base. However, WPX has been transitioning to oil from natural gas, which should improve profitability over the next few years.

The ratings also incorporate WPX's strong credit-protection measures and S&P’s estimate that the company will outspend cash flow from operations over the next two years, the agency said.

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