"We continue our geologic investigations (worldwide), but the lion's share of our exploration (budget) will be in the Gulf of Mexico deep water."
Pioneer responds to Moody's downgrading of its debt rating
Moody's Investor Service has downgraded the debt rating of Pioneer Natural Resources Co. to Ba1 from Baa3-effectively cutting the company's bond rating from investment grade to junk bond status-as Moody's cited concerns about the company's high-debt leverage and its ability to meaningfully reduce debt in the intermediate term.
Pioneer Pres. and CEO Scott Sheffield responded that the "company is split-rated," noting that competing rating service Standard & Poor's had not cut the company's debt rating. "Moody's downgraded us," he explained, "but it essentially hasn't hurt us, since we're not (anticipating) issuing any new debt."
Pioneer's total book capitalization as of Mar. 31, 1998, was $3.6 billion-comprising $2.1 billion in long-term debt and $1.5 billion in stockholders' equity. Debt as a percentage of total book capitalization was 58% for the 3-month period, compared with 56% at Dec. 31, 1997.
Sheffield said the company will "pay down its debt by about $500 million in the coming months."
That apparently is the plan if the company's divestment program is successful. Sheffield said about 10% of the company's total reserves are up for sale-primarily Hugoton producing properties in the Texas and Oklahoma panhandles.
He anticipates a number of bids in September (see related story, p. 31).
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