S&P cuts Delta Petroleum notes

Standard & Poor's said it affirmed its B- corporate credit rating on Delta Petroleum Corp.

At the same time, S&P said it lowered its rating on the company's $150 million senior notes due 2015 to CCC+ from B-.

The outlook remains stable.

S&P added that the upward revision of the borrowing base on Delta's credit facility to $120 million from $75 million prompted the downgrade of the unsecured notes.

The agency said that Delta's business risk profile is considered vulnerable, reflecting its small reserve base, high cost structure and an aggressive capital-expense program, as it seeks to diversify away from its Gulf Coast properties, adding that these weaknesses are partially mitigated by Delta's solid reserve life, high operatorship of its properties and good reserve replacement.

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