S&P revises Seven Generations recovery rating

S&P said it affirmed its BB issue-level rating on Seven Generations Energy Ltd.'s senior unsecured notes and revised its recovery rating to 3 from 4. The recovery rating of 3 reflects expectations for meaningful (50%-70%; rounded estimate: 50%) recovery in a hypothetical default scenario.

“The improved recovery prospects reflect our updated reserve valuation. We now separate condensate volumes from other natural gas liquids (NGLs), because we ascribe greater value to condensate reserves in our recovery analysis. Based on the company's 2018 reserves report, close to 50% of NGL reserves are condensate. With condensate proven reserves priced equivalent to our assumed light oil default value, our reserve valuation has meaningfully improved since our prior review,” said S&P in a press release.

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