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Gold/Mining/Energy : KERM'S KORNER

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To: Kerm Yerman who wrote (14236)	12/12/1998 2:16:00 AM
From: Kerm Yerman	of 15196

IN THE NEWS / Moody's Downgrades Hurricane Hydrocarbons TORONTO (CP) -- Low oil prices and tumult in Kazakhstan have left Hurricane Hydrocarbons Ltd. of Calgary in a "deteriorated financial situation," Moody's Investors Service reported Friday. The New York rating agency downgraded $105 million US worth of Hurricane 11.75 per cent senior notes to Caa2 from B3. "Hurricane appears to have consumed its balance sheet liquidity," Moody's said in a release, and "significant price relief appears to be needed" as world oil prices continue to plumb 12-year lows. Hurricane has the additional problems of operating amid the "legal, political and commercial risks" of the former Soviet republic's transition to capitalism. The company relies on crude-oil sales to a single Kazakh refinery. It is paid in local currency, the tenge, but its debt and other costs are in dollars. And there is "poor receivables quality" in dealings with the Shymkent refinery in central Asia. "Unless Hurricane's economics recover," Moody's says, "it will not generate sufficient cash flow for interest expenses or capital expenditures." Hurricane reported a net loss of $25.6 million dollars US on sales of $39.9 million in the three months ended Sept. 30, compared with a year-earlier profit of $9.5 million on $47 million in sales. Hurricane shares closed Friday at $2, down 14 cents on the day and down from a 52-week high of $12.25.

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