S&P cuts CrownRock debt; outlook positive

Standard & Poor's said it revised its outlook on CrownRock LP to positive from stable and affirmed its B- corporate credit rating on the company.

At the same time, the agency said it lowered the issue-level rating on CrownRock's senior unsecured debt to B- from B. The agency also revised the recovery rating on the debt to 4, indicating an expectation of average recovery in the event of a payment default, from 2.

"The positive outlook reflects CrownRock's progress in developing its asset base in the Permian Basin, which we expect to continue," said S&P credit analyst Marc Bromberg in a news release.

"The revised recovery rating for the senior unsecured debt reflects our new methodology for assigning recovery ratings to E&P issuers and CrownRock's increased borrowing base to $275 million from $160 million."

S&P said the positive outlook reflects the potential for an upgrade over the next 12 months if CrownRock can continue its solid operational performance and increase production to at least 10 Boe/d and maintain credit protection measures near current levels.

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