Standard & Poors Ratings Services Places Pogo Producing on CreditWatchadmin
Word that oil and gas producer Pogo Producing Co. may be sold prompted Standard & Poor’s Ratings Services on Friday to put Pogo’s “BB” corporate credit rating on a watch.
Putting that rating on CreditWatch means the company’s rating can be raised, lowered or affirmed in the near term. Pogo disclosed Thursday it is considering “strategic alternatives,” including the sale of certain assets or the entire company.
“A sale or merger carries the risk that the buyer or resulting merged company will have a lower rating,” S&P said, in a statement. “Alternatively, we could raise the ratings if Pogo is acquired by a company with a higher rating that guarantees Pogo’s debt.”
Pogo had $2.3 billion in outstanding debt as of Dec. 31.
The new listing status also reflects the risk that the company could pursue large share repurchases or special dividends funded with debt or asset sale proceeds. Such a move would give the company increased financial leverage or a smaller asset and production base, S&P said.
Shares of Pogo rose 22 cents to $50.80 on the New York Stock Exchange in afternoon trading.