In assigning a credit rating to newly-formed exploration and production company Aker BP, Moody's said the sector remains weak, but good opportunities exist.

Aker BP, a merger of Norwegian energy companies and a national subsidiary of BP, emerged late last year and reported adjusted earnings before interest, tax, depreciation and amortization at $485 million for the fourth quarter. On Wednesday, Moody's assigned a Ba2 rating -- a level described as speculative and subject to risk -- after the company proposed $500 million in unsecured notes to help repay its debt obligations

In a statement of rationale, Moody's said Aker BP had a "strong financial profile," provided oil prices stay in a range between $40 and $60 per barrel.

Aker BP is a mid-sized exploration and production company with a strong portfolio on the Norwegian continental shelf. Operating costs there are low by relative standards at about $11 per barrel.

The company reported first quarter production of 145.3 million barrels of oil equivalent, an increase of 14.8 percent from the previous quarter. Most of the company's output came from the Alvheim license area, which draws oil using a floating production facility from four fields in the greater region.

Moody's said Aker BP remains constrained by a portfolio that's more or less isolated to offshore Norway. The Alvheim area accounted for more than half of the company's total production last year and it has a small asset base compared with some of its peers.

The ratings agency said it expected crude oil prices to hover around $50 per barrel "in the near future."

"We expect the company's financial profile to deteriorate to some extent as a result of the decline in production until 2019, still fairly strong compared to similarly rated peers," the ratings agency stated.

Recovery would come from Aker BP's role in the mega Johan Sverdrup project offshore Norway, provided it starts as expected in 2020.

Tweet

Subsea pipelines offer shelter to important commercial fish species in Australia
Washington (UPI) Jun 12, 2017
For conservationists and environmentalists, pipelines and the oil they carry are mostly viewed as a threat to ecological health. But new research suggests they serve as a safe haven for important commercial fish species off the coast of northwest Australia. The North West Shelf, which lies off the coast of Western Australia, features an array of gas wells, subsea pipelines and other kin ... read more

Related Links
All About Oil and Gas News at OilGasDaily.com

Thanks for being here; We need your help. The Space Media Network continues to grow but revenues have never been harder to maintain. With the rise of Ad Blockers, and Facebook - our traditional revenue sources via quality network advertising continues to decline. And unlike so many other news sites, we don't have a paywall - with those annoying usernames and passwords. Our news coverage takes time and effort to publish 365 days a year. If you find our news sites informative and useful then please consider becoming a regular supporter or for now make a one off contribution.
SpaceMediaNetwork Contributor $5 Billed Once credit card or paypal		SpaceMediaNetwork Monthly Supporter $5 Billed Monthly paypal only