CHICAGO, May 8 /PRNewswire/ -- Duff & Phelps Credit Rating Co. (DCR) has
placed the ratings of National Fuel Gas Company (NFG) on Rating Watch-Down
following its announced pending acquisition of Tri Link Resources, Ltd. (Tri
Link). NFG's ratings include: unsecured debentures and medium-term notes at
'A' (Single-A) and commercial paper at 'D-1' (D-One).
NFG recently announced that its oil and gas exploration and production
(E&P) subsidiary, Seneca Resources Corporation, would acquire Tri Link for
C$340 million, or approximately $230 million, including assumed debt. Tri
Link is a Canadian E&P company focused primarily on oil. The acquisition
would raise NFG's reserve base to nearly 1 trillion cubic feet equivalent,
weighted approximately two-thirds oil and one-third gas. Production would be
equally weighted between oil and gas.
The rating action reflects the heightening business risk profile of NFG as
well as the initial leveraging impact of the acquisition.
Post-closing, Seneca would represent more than one-third of consolidated
assets and cash flow, having grown quickly with the Tri Link transaction and
three acquisitions completed in 1998. The previous acquisitions also were
debt-ladening to the capital structure. DCR expects to meet with NFG shortly
to review the longer-term financing of the acquisition and review the credit
ratings.
NFG is a diversified holding company for integrated natural gas operations
involved in: regulated gas distribution serving more than 733,000 customers in
western New York, including Buffalo, and northwestern Pennsylvania; regulated
regional gas transmission and storage services; oil and gas E&P operating
primarily in the Gulf Coast, Appalachia and California; and various other
nonregulated energy investments.
SOURCE Duff & Phelps Credit Rating Co.
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Related links:
http://www.dcrco.com
CONTACT:
Brian M. Youngberg, CFA, 312-368-3332,
youngberg@dcrco.com, or John C. Dell, 312-368-3161,
dell@dcrco.com, both with DCR
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