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
Cimarex Energy Co.
Corporate credit rating BB+/Stable/--
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
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