TEXT-Moody's raises Complete Production Services to Ba3

(The following statement was released by the rating agency)

Approximately $650 million of rated debt securities affected

Jan 13 - Moody's Investors Service upgraded Complete Production Services,
Inc's (CPX.N) (Complete) Corporate Family Rating (CFR) and Probability of
Default Rating to Ba3 from B1. The rating on Complete's $650 million senior
unsecured notes due 2016 was also upgraded to B1 (LGD4, 65%) from B2 (LGD4,
67%). The outlook is stable. This concludes our ratings review begun in October
2008.
"The upgrade reflects Complete's increased size and durable market position,"
commented Pete Speer, Moody's Vice-President. "Over the past two years Complete
has moderated its acquisition activity, reduced debt levels and strengthened
its credit profile consistent with a Ba3 rating."
The outlook is stable despite the expected deterioration in demand for
Complete's services in 2009 and weakening of its credit metrics over the year.
Moody's expects that management will conservatively manage liquidity through
this downturn by reducing capital expenditures and using free cash flow to
reduce revolving credit facility borrowings.
Given the current uncertainty regarding the depth and duration of the downturn
in oilfield services demand, Moody's expects that acquisitions would be limited
and conservatively funded.
Significant debt-funded acquisitions could result in a negative rating action.
In addition, a more severe downturn that lasts for a prolonged period could
reduce liquidity to levels that result in a negative outlook or ratings
downgrade. The expected deterioration in sector conditions makes a positive
rating action unlikely in the near term.
From Complete's initial formation in the fall of 2005 through the end of 2006,
the company executed nearly 20 acquisitions to rapidly increase its size and
expand its service offerings and geographic reach. Since then the company has
done fewer acquisitions that have generally added to its existing services
lines and geographic positions, while still using transactions to enter
additional basins like the Marcellus Shale through the October 2008 acquisition
of Appalachian Well Services. Complete appears to have successfully integrated
its acquisitions to date and its operating results held up well in comparison
to peers during the weaker conditions in the second half of 2007 and early
2008, indicating a business profile consistent with a Ba3 rating.
The company's ratings are restrained by its exposure to the drilling cycle,
which drives over two-thirds of its revenues. Complete's Ba3 rating also
reflects its smaller size and market position in many of its service lines
compared to the major oilfield services companies. The company's long-term
strategy continues to include being an active participant in industry
consolidation, which is necessary for enhancing its competitive position but
entails valuation and integration risk.
Moody's last rating action on Complete dates from October 27, 2008 at which
time Moody's placed Complete's ratings on review for possible upgrade. The
principal methodology used in rating Complete was Moody's Global Oilfield
Services Industry rating methodology which can be found at www.moodys.com in
the Credit Policy & Methodologies directory, in the Ratings Methodologies
subdirectory. Other methodologies and factors that may have been considered in
the process of rating Complete can also be found in the Credit Policy &
Methodologies directory.
Complete Production Services, Inc., headquartered in Houston, TX, is a provider
of oilfield services and products for oil and gas companies.
(New York Ratings Team)