Noble Energy, the firm once founded in Oklahoma and headquartered in Ardmore gets a ‘stable’ Rating Outlook from Fitch Ratings as well as a “BBB-‘ first-time ratings to the company’s Long-term Issuer Default Rating and senior unsecured ratings.
The announcement by Fitch will have an impact on the company’s $8 billion in debt.
Fitch indicated the Texas based firm has a high quality and diversified portfolio with international gas, deep water offshore Gulf of Mexico and West Africa projects as well as a presence in the DJ, Permian, Eagle Ford and Marcellus plays in the U.S.
But Fitch also said Noble Energy had some offsetting factors including limited near-term free cash flow generation, long-term capital spending requirements, capital structure concerns and execution risk on the asset sales side.
Still, Noble’s liquidity is considered strong with $5.2 billion of pro forma liquidity at year-end 2015. Noble has a current maturity wall of nearly $2.4 billion consisting of a recently established term loan and senior notes due in early 2019. Fitch said it views the maturity wall as a credit concern, but believes that capital and term loan market access will remain intact with a portion reduced through proceeds from asset sales in the next three years.
Those asset sales could arise from Noble’s many offshore Gulf of Mexico, Eastern Mediterranean and non-core acreage and infrastructure assets, should the company decide to repay debt and fund capex. Fitch likes gthe fact that Noble has shown willingness to pull-back on shareholder-friendly actions, such as reducing the dividend 40 percent and using equity for M and A activity. It stated that the required sale of a portion of Noble’s interest in the Tamar asset within the next six years will reduce its ownership of a key high cash flow generating asset, but generate additional liquidity.
