S&P rates Hibiscus, notes B+

S&P said it assigned preliminary B+ ratings to Hibiscus Petroleum Bhd. and the dollar-denominated senior notes it will guarantee.

“Our B+ issuer credit rating on Hibiscus reflects the company's stable production, low-cost assets and geographically diversified operations across Malaysia, the United Kingdom and Vietnam. Also supporting our view of the rating is Hibiscus' moderate balance sheet, adequate liquidity and a track record of conservative financial management,” S&P said in a press release.

“Tempering these strengths are the company's small scale, low reserve replacement ratio, and the business integration risks associated with the acquisition of the Repsol assets in Malaysia and Vietnam–the company will almost triple its current production levels. Over the next two to three years, we expect Hibiscus' capital intensity to increase, while its future earnings and cash flows remain directly exposed to volatile oil prices,” the agency added.

The outlook is stable.

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