TEXT-S&P cuts Kodiak Oil & Gas snr unsecured rating to 'CCC+'
Aug 3 - Standard & Poor's Ratings Services said today it has revised its recovery rating on Kodiak Oil & Gas' senior unsecured debt to '6' from '5'. The '6' recovery rating reflects our expectation for a negligible (0% to 10%) recovery for creditors in the event of a payment default. As a result, we have lowered our rating on Kodiak's $800 million 8.125% unsecured notes to 'CCC+' from 'B-'. Our 'B' corporate credit rating and stable outlook are unchanged. The downgrade on the senior unsecured issue and revision of the recovery ratings reflects the lower recovery valuation following the recently announced $150 million increase in Kodiak's borrowing base to $375 million from $225 million. Our recovery analysis incorporated an updated PV-10 valuation based on June 30, 2012, proven reserves using Standard & Poor's recovery methodology and stressed price deck assumptions. For the complete recovery analysis, see our recovery report on Kodiak, to be published after this release on RatingsDirect. RELATED RESEARCH AND CRITERIA -- Credit FAQ: Why Standard & Poor's Revised Its Assumptions For Recovery Analysis On Exploration And Production Companies, Nov. 3, 2010 -- 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 Kodiak Oil & Gas Corporate credit rating B/Stable/-- Downgraded; Recovery Rating Revised To From Senior unsecured debt CCC+ B- recovery rating 6 5 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.