S&P gives Paramount Resources B-

S&P said it gave Paramount Resources Ltd. a B- issuer rating with a positive outlook.

“The company's relatively higher cost structure and weak profitability metrics constrain improvement in our business risk assessment. We believe the company has higher cash operating costs relative to those of peers in the 'B' category. Although operating costs have been declining due to initiatives such as innovation, technological advancement, and new water disposal wells at Karr, Paramount's cash operating costs are slightly higher than those of its peers,” S&P said in a press release.

Production is forecasted to increase to about 80,000 boe per day in 2021 from 68,000 boe per day in 2020. “Considering significantly higher cash flows and capital spending at sustaining levels in 2021, we estimate the company will generate positive free cash flows of more than C$100 million,” the agency said.

The outlook reflects an expectation for strong credit measures, with an adjusted FFO-to-debt ratio estimated to average 45% over the next two years, S&P said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.