(The following statement was released by the rating agency)
July 25 - Standard & Poor's Ratings Services said today that it raised its senior unsecured debt ratings on Midland, Texas-based CrownRock LP to 'B' (one notch higher than the corporate credit rating) from 'CCC+'. We simultaneously revised the recovery rating on these notes to '2', indicating our expectation of substantial (70% to 90%) recovery in the event of a payment default, from '5'. The revised recovery reflects changes to CrownRock's reserve values following a company-provided PV-10 report using mid-year 2012 reserves at our stressed pricing assumptions of $45 per barrel of West Texas Intermediate (WTI) crude oil and $4.00 per million British Thermal Units (BTU) of Henry Hub natural gas. For the complete recovery analysis, see our recovery report on CrownRock to be published on RatingsDirect following the release of this report. The corporate credit rating on CrownRock reflects its small oil and gas reserve and production base as an independent E&P company. The ratings also incorporate the company's aggressive capital spending requirements to hold its acreage, a high percentage of undeveloped reserves, its participation in a volatile and commodity-based industry, and reliance on one basin (the Wolfberry region of the Permian Basin) for its production growth and cash flows. These negative credit factors are only partially buffered by an oil-weighted reserve profile and a competitive cost structure. We consider CrownRock's business risk to be "vulnerable" and its financial profile to be "highly leveraged". RELATED RESEARCH AND RATINGS
-- Credit FAQ: Why Standard & Poor's Revised Its Assumptions For Recovery Analysis On Exploration And Production Companies, Nov. 3, 2010.
-- Criteria Guidelines For Recovery Ratings, Aug. 10, 2009. RATINGS LIST CrownRock LP Corporate credit rating B-/Stable/-- Ratings Raised; Recovery Rating Revised
To From CrownRock LP CrownRock Finance Inc. Senior unsecured debt ratings B CCC+ Recovery rating 2 5 (Caryn Trokie, New York Ratings Unit)