S&P moves Strathcona view to positive

S&P said it revised its outlook for Strathcona Resources Ltd. to positive from stable and affirmed the B+ issuer rating and BB- issue with 2 recovery ratings on the company’s senior unsecured notes.

“The positive outlook reflects the material increase in operating scale, with pro forma production estimated at about 150,000 boe per day, with heavy oil accounting for the majority of the product mix. Following the company's announced acquisition of Serafina (40,000 boe/day of heavy oil) and recently amalgamated assets of Caltex Resources and Cenovus Energy Inc.'s Tucker thermal oil assets in March 2022 (together about 32,000 boe/day), we project a material increase in Strathcona's production base,” the agency said in a press release.

S&P noted the improved outlook indicates an upgrade could be in the offing in the next 12 months, if Strathcona can integrate the acquisitions and pay down debt so that it can keep undrawn capacity under its committed credit facility above 50%.

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