Page 16 - LatAmOil Week 09 2021

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Hunt Peru has good liquidity. Cash in the amount in the Patagonia region of Argentina and expo- operational and macroeconomic risks associ-
of about $57mn in December 2020 plus around sure to the Argentine electricity industry’s regu- ated with small-scale oil and gas production.
$260mn in cash from operations through mid- latory risk. Fitch considers the company and its Fitch expects the company’s working interest
2022, as expected by Moody’s, will fund $75mn industry peers as having heightened counter- production to be on average 17,000 boepd from
in debt amortisation, $40mn in capital spending, party risk with Compania Administradora del 2021-2024, a downward adjustment from previ-
plus $200mn in shareholders distributions in Mercado Mayorista Electrico (CAMMESA) as ous years in response to a declining and volatile
the period. Hunt Peru also counts on a $30mn the main off-takers, given CAMMESA is highly pricing environment.
three-year committed revolving credit facility dependent on the Argentine government subsi- Hydrocarbon Reserves: The company
that matures in May 2021 and Moody’s believes dies in order to fulfil its obligations, but this risk reported a 25% decrease in 1P reserves to
the company will renew shortly. Hunt Peru will is slightly mitigated under the RenovAR pro- 38.4mmboe from 51.5mmboe in 2019. Fitch
start to amortise its senior unsecured notes in gramme with the presence of the FODER trust expects the company will maintain its 6.1 years
late 2021 (about $50mn annually). fund, which is prefunded, and is designed to be 1P reserve life by maintaining production at
Hunt Peru’s Ba2 ratings are constrained by a payment guarantee to cover, ongoing power 17,000 boe/d. Further, the company’s total debt
the high dividend payout to its parent company. purchase agreement (PPA) payments and ter- to 1P increased by 11% to $10.14/barrels in 2020
A significant debt reduction on a sustained basis, mination payment obligation arising from the from $9.13/barrels in 2019. The company has
without affecting its operating performance, rights of IPP to sell their project to the FODER strong concession life with the earliest material
could trigger a positive rating action on Hunt in specific macroeconomic or sector risk occur. concession expiring in 2026. This concession, El
Peru’s ratings. The credit profile of Hunt Peru’s Applicable Country-Ceiling: PCR’s FC IDR Medanito, currently accounts for approximately
parent company, Hunt Oil Company, would be is rated at the country-ceiling of Ecuador (B-) as 60% of production. Other concessions have
relevant information for Moody’s to consider a cash flow from its Colombian and Ecuadorian longer expiration dates.
positive action on Hunt Peru’s rating. operations cover its hard-currency consoli- PCR is a small oil and gas producer with
Hunt Peru’s Ba2 ratings could be downgraded dated interest expense. Fitch estimates PCR’s operation in Argentina, Ecuador and Colombia.
if it faces extended operational disruptions or if hard-currency consolidated interest expense is Argentina represents 63% of 2020 production
its production declines significantly. An interest $35mn per annum, and its Colombia EBITDA while Ecuador contributed 33% and Colombia
coverage ratio, as measured by EBITDA/interest is $11mn and Ecuadorian EBITDA is $25mn. 4%. Production is expected to remain flat to an
expense, below 5 times could also trigger a nega- Collectively, they cover hard-currency interest average of 17,000 boe/d through 2024, which is
tive rating action. expense. In the event that cash flow from both comparable with its ‘B’ rated peers, GeoPark Ltd
Hunt Peru is a wholly-owned, indirect sub- operations does not cover hard-currency inter- (B+/Stable), Frontera Energy (B/Stable), Gran
sidiary of Hunt Oil Company, a large private- est expense, the applicable country ceiling will Tierra Energy (CCC) and Compania General
ly-owned hydrocarbon company in the United be that of Argentina, and the company’s FC IDR de Combustibles (CGC; CCC). Over the rated
States. Hunt Peru is one of the leading explora- will be revised in the event it is below its current horizon, PCR will have the smallest production
tion and production companies in Peru, with a level of B-. profile amongst rated peers in Latin Amer-
focus on the exploitation of hydrocarbons and Small Production Profile: PCR’s ratings ica. Fitch estimates, Geopark will reach nearly
related activities, such as the purchase, sale, reflect its small and concentrated production 45,000 boepd by 2020-21, Gran Tierra around
processing and fractionation of hydrocarbons, profile, which is consistent the B rating category. 32,000boepd, CGC with below 40,000boepd,
mostly natural gas. In 2020 it posted $490mn in Although the company has exploration and pro- and Frontera Energy 45,000 boepd. Further,
revenues and $769mn in total assets. duction interest in 10 blocks in Argentina (five), PCR’s reported 38.4mn boe of 1P reserves at the
Moody’s Investors Service, March 01 2021 Ecuador (four) and Colombia (one), its asset end of 2019 equating to a reserve life of 6.1 years
base as well as all of the company’s 1P reserves is lower than line GeoPark at 7.6 years and Fron-
Fitch Ratings affirms and production is concentrated in Argentina tera Energy’s 7.0 years, but higher than Gran
(70%), Ecuador (25%) and Colombia (5%). This Tierra’s 5.0 years and CGC’s 5.0 years.
Petroquimica Comodoro limited diversification exposes the company to Fitch Ratings, March 02 2021
Rivadavia’s B- rating

Fitch Ratings has affirmed Petroquimica
Comodoro Rivadavia’s (PCR) Long-Term For-
eign and Local Currency Issuer Default Rat-
ings (IDRs) at B-. The Rating Outlook has been
revised to Stable from Negative.
PCR’s B- Long-Term Foreign Currency IDR
is rated at the country ceiling of Ecuador (B-) as
cash flow from its Colombian and Ecuadorian
operations cover its hard-currency consolidated
interest expense. The Outlook revision reflects
that of Ecuador, which is Stable. Fitch expects
PCR’s ex-Argentine EBITDA to cover hard-cur-
rency consolidated interest expense over the
rated horizon.
PCR’s Local Currency IDR reflects the issuer’s
small oil and gas production size and reserve con-
centration, small cement business concentrated

P16 www. NEWSBASE .com Week 09 04•March•2021