TEXT-S&P on various oil, gas services companies

(The following statement was released by the ratings agency)

Aug 15 - Standard & Poor's Ratings Services, following an industry review, took several rating actions on companies in the oil & gas service sector. The review was prompted by our view that healthy industry conditions will likely remain for the near to medium term and follows Standard & Poor's recent announcement that it will introduce several enhancements to its analytical approach to rating speculative-grade debt. The rating actions listed below were on speculative-grade companies. A consistent theme for these companies was the strength of their financial performance and our belief that similar performance would most likely continue for the near to medium term.

Standard & Poor's raised the corporate credit rating on Chart Industries Inc. to 'BB-' from 'B+', its senior secured rating to 'BB+' from 'BB', and its subordinated debt rating to 'B+' from 'B'. The outlook is stable. The upgrade reflects continued strong operating performance, a significant reduction in leverage, and expectations for solid results to persist over the near term given the company's backlog. Chart has more than doubled its EBITDA to well over $100 million for the trailing 12 months ended June 30, 2008, from less than $50 million in 2005, when we initially rated the company. Furthermore, its already healthy gross profit margins have improved from the high 20% area to more than 30% for the first half of 2008. Strong operating performance and $100 million of debt repayment under its term loan have resulted in leverage decreasing from more than 6x to approximately 2x as of June 30, 2008. Still, the speculative-grade rating on Chart reflects the cyclicality inherent in the industrial gas and natural gas processing markets and the company's limited scale.

Standard & Poor's raised Superior Energy Services Inc. corporate credit and senior unsecured ratings to 'BB+' from 'BB'. The outlook is stable. The upgrade was based on Superior's strong operating performance, geographic diversity, decreased commodity exposure following the divestiture of the company's 75% interest in SPN Resources and strong financial metrics. Debt to EBITDA for last 12 months ended June 30, 2008 was a healthy 1.1x and EBITDA interest coverage was in excess of 20x. At this juncture, an upgrade is limited for the company based on our view of industry conditions and company's business scope.

Standard & Poor's revised its outlook on Global Geophysical Services Inc. to positive from stable. At the same time, we affirmed its 'B-' corporate credit rating. The outlook revision reflects the company's improved operating performance and financial metrics and our expectations that the industry fundamentals will continue to be strong in the near term. The likely continued growth in its seismic operations will support underlying improvement in profitability. We are likely to raise the ratings on Global in the first half of 2009, contingent on robust EBITDA growth, improving margins and strong financial metrics.

Standard & Poor's also revised its outlook on Stewart & Stevenson LLC to positive from stable. In addition, we affirmed its 'B' corporate credit rating. The outlook revision reflects increased scale and scope and improved financial metrics. Since the rating was assigned in 2006, Stewart & Stevenson has considerably increased its EBITDA, resulting in interest coverage of 5.1x for the 12-month period ended April 30, 2008 and adjusted debt to EBITDA of 2.1x. Despite recent softness in its business due to overcapacity and pricing pressures in the well stimulation market, we expect North American exploration and production companies' increasing focus on unconventional "resource" plays to be a favorable long-term driver for pressure pumping demand which should help Stewart & Stevenson maintain its financial profile. Still, the speculative-grade rating on Stewart & Stevenson reflects the company's dependence on cyclical end markets for its core products and services and its limited track record in its current configuration. (New York Ratings Team)