TEXT-S&P rates Cimarex Energy notes 'BB+'
March 22 - Standard & Poor's Ratings Services today assigned its 'BB+' senior unsecured issue rating to Denver-based Cimarex Energy Co.'s proposed $650 million senior unsecured notes due 2022. The recovery rating on the notes is '3', indicating our expectation of meaningful (50% to 70%) recovery in the event of a payment default. Cimarex's 'BB+' corporate credit rating and stable outlook are unaffected. The exploration and production company intends to use proceeds to repurchase its existing $350 million notes due 2017, repay outstanding debt on its credit facility and for general purposes. As of Dec. 31, 2011, Cimarex had about $405 million in balance sheet debt. The ratings on Denver-based Cimarex Energy Co. reflect the company's "fair" business profile (as our criteria define the term) as a midsize exploration and production company in the volatile and capital-intensive oil and natural gas industry, its moderate reserve life, and good operating performance. The rating also reflects the company's "intermediate" financial risk, given Cimarex's consistently strong financial measures (which mitigate its lack of scale relative to larger peers), its moderate financial leverage, and strong liquidity. (For the complete corporate credit rating rationale, see our summary analysis on Cimarex published on Dec. 13, 2011.) RELATED RESEARCH AND CRITERIA Assumptions: Revised Assumptions For Assigning Recovery Ratings To The Debt Of U.S. Oil And Gas Exploration And Production Companies, Sept. 30, 2010 RATINGS LIST Cimarex Energy Co. Corporate credit rating BB+/Stable/-- New Rating Proposed $650 mil sr unsecd nts due 2022 BB+ Recovery rating 3 Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.