Standard & Poor's Affirms Triton Energy's Credit Ratings with Stable Outlook

Strategic Insights -

Standard & Poor's recently affirmed the single-'B'-plus corporate credit and senior debt ratings on Triton Energy Inc. following the company's announcement of a significant investment by Hicks, Muse, Tate & Furst Inc. The investment of up to $350 million will be used to pay down Triton's remaining bank debt and for general corporate purposes. This move alleviates concerns regarding Triton's funding capacity for its capital spending requirements, particularly for its Colombian operations.

Key Takeaways:

  • Standard & Poor's affirmed Triton Energy's single-'B'-plus corporate credit and senior debt ratings with a stable outlook.
  • The investment of up to $350 million by Hicks, Muse, Tate & Furst Inc. will be used to pay down Triton's remaining bank debt and for general corporate purposes.
  • The company's near-term financial flexibility has significantly increased with the completion of the announced transactions.
  • Triton Energy's 40% proved reserve base is attributed to its 9.6% nonoperating interest in the Cuisiana and Cupiagua oil fields in Colombia.
  • The company's investment in the Malaysia-Thailand Joint Development Area lacks an assured market for future production without a signed gas sales contract.
  • Triton Energy's cash flow generation is constrained relative to its near-term capital spending requirements, particularly for its Colombian operations.

Statistics:

  • $350 million: The maximum investment by Hicks, Muse, Tate & Furst Inc. in Triton Energy Inc.
  • $130 million: The initial investment by Hicks Muse to acquire preferred shares of Triton Energy Inc.
  • 17%: The percentage of Triton Energy's company that Hicks Muse will own through the acquisition of preferred shares.
  • 22%: The percentage of Triton Energy's pro forma shares outstanding that will be owned by the company's shareholders through rights to purchase additional preferred stock.
  • 382 million boe: The total proved reserve base of Triton Energy at year-end 1997.
  • 40%: The percentage of Triton Energy's proved reserve base attributed to its 9.6% nonoperating interest in the Cuisiana and Cupiagua oil fields in Colombia.
  • $150 million: The proceeds from the sale of half of Triton Energy's interest in the Malaysia-Thailand Joint Development Area to Atlantic Richfield Co.

Sources:

  • Standard & Poor's, "CreditWire" (September 1, 1998)
  • Dmitri P. Nayduch, Standard & Poor's, (212) 208-8396, [dnayduch@standardpoors.com](mailto:dnayduch@standardpoors.com)