Things are looking up for Calgary-based Hurricane Hydrocarbons Ltd., which recently emerged from bankruptcy (OGJ, Feb. 28, p. 36). Moody's Investors Service said it is upgrading the company's senior notes to B3 from C to reflect its reorganization and recent merger with Shymkentnefteorgsyntez (ShNOS), which operates a refinery Shymkent, Kazakhstan.
The revised grade is the result of the company's emergence from restructuring, says Moody's, and reflects the company's significant low-risk reserves, its increasing low-cost crude oil production, the anticipated improvement in its performance as a result of its merger with ShNOS, the benefits of integration, the strong downstream market share it will hold in central and southeastern Kazakhstan, and an improved financial position ensuing from the company's restructuring.
Moody's said the new grade also reflects the risks from the concentration of Hurricane's reserves in the South Turgai basin in Kazakhstan, its dependence on the local market for the vast majority of its refined product sales, the need for Hurricane to develop export markets for its growing crude production, the potential for increased competition from other regional refineries, the lack of sophistication of the Shymkent refinery, the need to develop a greater range of products, vulnerability to changes in regulation, and the group's considerable capital requirements for reserves development and refinery upgrade.
Hurricane Hydrocarbons is primarily an oil exploration and development company operating in the South Turgai basin in Kazakhstan through its 90% subsidiary, Hurricane Kumkol Munai, registered in Kazakhstan. It has proved reserves of about 254 million boe.
