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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Big Dog who wrote (84809)	1/19/2001 9:29:43 PM
From: Razorbak	Read Replies (1) \| Respond to of 95453

"S&P: Petroleum Geo-Services Rtgs Lowered, Outlook Stable" Updated: Friday, January 19, 2001 12:07 PM ET NEW YORK (Standard & Poor's CreditWire) Jan. 19, 2001--Standard & Poor's today downgraded its ratings on Petroleum Geo-Services ASA (PGO, news, msgs) (see list below). The outlook is stable. The downgrades followed the announcement by PGO, a large provider of seismic acquisition, data processing, and floating production services, that fourth-quarter results will be weaker than expected, in part due to flat seismic data library sales. The weak performance of the data library in the fourth quarter is concerning given that it usually is PGO's best performing period for data library sales and that the company's primary customers are substantially increasing drilling activity. Standard & Poor's still believes that the seismic business is integral to the oil and gas exploration and production industry and is experiencing a nascent, cyclical recovery that will be aided by industry consolidation, although recent evidence suggests that the pace and magnitude of the industry upturn is weaker than prior expectations. PGO does not forecast a meaningful recovery in its seismic and floating production storage and off-loading (FPSO, news, msgs) businesses until the second half of 2001. Results during the first half of 2001 will be hampered by additional unexpected delays in placing the FPSO Ramform Banff back into service. To date, all delays on the Banff were covered by business interruption insurance, but coverage under these policies will soon expire. Given these results, total debt to EBITDA for 2001 is likely to be weak, ranging only from 3.2 times (x) to 3.5x and the company is likely to generate scant internal cash flow for debt reduction. Standard & Poor's had expected the company to begin to meaningfully deleverage from internal funds in 2001. PGO also announced today that it will take a one-time noncash pretax charge of about $365 million to write down nonperforming assets (including various seismic surveys) and provide for losses on certain long-term contracts. Although these write-downs are disappointing, the balance-sheet impact will be largely offset by unanticipated gains on asset sales of $230 million in 2000. Additional gains are expected when the company sells its Atlantis assets, which could fetch $150 million to $200 million. None of the assets sold in 2000 or that are expected to be sold in 2001 generated material cash flow. OUTLOOK: STABLE PGO is expected to experience a modest recovery in 2001. All proceeds from divestitures are expected to be used to reduce debt and the company is expected to progressively deleverage until achieving its target of 45% total debt to total capital. Standard & Poor's said. --CreditWire RATINGS DOWNGRADED TO FROM Petroleum Geo-Services ASA Corporate credit rating BBB- BBB Senior unsecured debt BBB- BBB Shelf debt senior unsecured BBB- BBB Shelf debt subordinated/ preferred stock BB+/BB BBB-/BB+ Oslo Seismic Services Inc. Corporate credit rating BBB- BBB Senior secured debt BBB- BBB PGS Trust I Preferred stock BB BB+ qw2001.quicken.com