Industry Study. Oil and Gas Financial Profile Study, Q3 2012: Profiles Weaken but Remain at Cycle High

Transcription

1 Industry Study Oil and Gas Financial Profile Study, Q3 2012: Profiles Weaken but Remain at Cycle High march 2013

2 CONTACT INFORMATION James Jung, CFA, FRM, CMA Senior Vice President Energy & Banking Tel Scott Schroeders, CA Assistant Vice President Corporate Research & Analysis Tel Eric Eng, MBA Vice President, Energy & Mining Corporate Research & Analysis Tel Elizabeth Staltari Financial Analyst Corporate Research & Analysis Tel Jumana Bahrainwala Junior Financial Analyst, Co-Op Corporate Research & Analysis Minrui Tang Junior Financial Analyst, Co-Op Corporate Research & Analysis Julie Zhu Junior Financial Analyst, Co-Op Corporate Research & Analysis DBRS is a full-service credit rating agency established in Privately owned and operated without affiliation to any financial institution, DBRS is respected for its independent, third-party evaluations of corporate and government issues, spanning North America, Europe and Asia. DBRS s extensive coverage of securitizations and structured finance transactions solidifies our standing as a leading provider of comprehensive, in-depth credit analysis. All DBRS ratings and research are available in hard-copy format and electronically on Bloomberg and at DBRS.com, our lead delivery tool for organized, Web-based, up-to-the-minute information. We remain committed to continuously refining our expertise in the analysis of credit quality and are dedicated to maintaining objective and credible opinions within the global financial marketplace.

3 Oil and Gas Financial Profile Study, Q TABLE OF CONTENTS Executive 6 Slight Balance Sheet Deterioration in 9M Weaker Cash Flow as Commodity Prices Fall 6 Significantly Increased 6 Key Ratios Weaken but Remain Strong Outlook: Credit Quality Parked in Neutral 6 Aggregate Data Tables 7 Operating Cash Flow Dividend Payout Ratio 11 to Depreciation 12 Gross 13 EBITDA Interest Coverage 14 Adjusted Debt in Capital Structure 15 Adjusted Debt to Cash Flow 16 Company Financial Profile Rankings 17 of Results 18 Company Financial Profile Rankings 19 Company Financial Profile Rankings Grouping 23 Company List 26 Financial Profile Tables of Individual Companies 27 Americas Petrogas Inc. 44 Anadarko Petroleum Corporation 45 Apache Corporation 46 ARC Resources Ltd. 47 Athabasca Oil Corporation 48 Baytex Energy Corp. 49 Berry Petroleum Company 50 Bill Barrett Corporation 51 Birchcliff Energy Ltd. 52 Bonavista Energy Corporation 53 Bonterra Energy Corp. 54 BP p.l.c. 55 Cabot Oil & Gas Corporation 56 Canadian Natural Resources Limited 57 Canadian Oil Sands Limited 58 Cenovus Energy Inc. 59 Cequence Energy Ltd. 60 Chesapeake Energy Corporation 61 3

4 Chevron Corporation 62 Chinook Energy Inc. 63 Cimarex Energy Co. 64 Concho Resources Inc. 65 Connacher Oil and Gas Limited 66 ConocoPhillips 67 Continental Resources Inc. 68 Crescent Point Energy Corp. 69 Crew Energy Inc. 70 Denbury Resources Inc. 71 Devon Energy Corporation 72 Encana Corporation 73 Energen Corporation 74 Enerplus Corporation 75 Eni S.p.A. 76 EOG Resources, Inc. 77 EXCO Resources, Inc. 78 Exxon Mobil Corporation 79 Forest Oil Corporation 80 Gran Tierra Energy Inc. 81 Gulfport Energy Corporation 82 Harvest Operations Corp. 83 Hess Corporation 84 Husky Energy Inc. 85 Imperial Oil Limited 86 Kodiak Oil & Gas Corp. 87 Kosmos Energy Ltd. 88 Laredo Petroleum Holdings, Inc. 89 Legacy Oil + Gas Inc. 90 LINN Energy, LLC 91 Marathon Oil Corporation 92 McMoRan Exploration Co. 93 MDU Resources Group, Inc. 94 MEG Energy Corp. 95 Murphy Oil Corporation 96 National Fuel Gas Company 97 Newfield Exploration Company 98 Nexen Inc. 99 Noble Energy, Inc. 100 Northern Oil and Gas, Inc. 101 NuVista Energy Ltd. 102 Oasis Petroleum Inc. 103 Occidental Petroleum Corporation 104 4

5 Pacific Rubiales Energy Corp. 105 Painted Pony Petroleum Ltd. 106 Paramount Resources Ltd. 107 Parex Resources Inc. 108 Pengrowth Energy Corporation 109 Penn West Exploration 110 Perpetual Energy Inc. 111 PetroBakken Energy Ltd. 112 Petróleo Brasileiro S.A. 113 PetroChina Company Limited 114 Petrominerales Ltd. 115 Peyto Exploration & Development Corp. 116 Pioneer Natural Resources Co. 117 Plains Exploration & Production Company 118 QEP Resources, Inc. 119 Quicksilver Resources Inc. 120 Range Resources Corporation 121 Rosetta Resources Inc. 122 Royal Dutch Shell plc 123 SandRidge Energy, Inc. 124 SM Energy Company 125 Southern Pacific Resouce Corp. 126 Southwestern Energy Company 127 Statoil ASA 128 Stone Energy Corporation 129 Suncor Energy Inc. 130 Surge Energy Inc. 131 Talisman Energy Inc. 132 Total S.A. and Subsidiaries 133 Tourmaline Oil Corp. 134 TransGlobe Energy Corporation 135 Trilogy Energy Corp. 136 Twin Butte Energy Ltd. 137 Ultra Petroleum Corp. 138 Vermilion Energy Inc. 139 W&T Offshore 140 Whitecap Resources Inc. 141 Whiting Petroleum Corporation 142 WPX Energy, Inc

6 Executive This study is a comprehensive review of the financial profiles on both an aggregate and individual basis for the top 100 oil and gas companies from 2007 through the first nine months of 2012 (9M 2012). The review assesses trends pertaining to capex, operating cash flow, dividends and debt. Additionally, key ratios including debt to cash flow, interest coverage, debt to capital and dividend payout are analyzed with the purpose of gauging the health of the sector. SLIGHT BALANCE SHEET DETERIORATION IN 9M 2012 Collectively, the balance sheet for the industry weakened modestly in 9M 2012 as cash flow declined, capex increased and free cash flow deficit was largely financed through debt. However, the slight deterioration in the balance sheet has been largely mitigated by ample access to the capital markets, significant cash balances and available credit facilities. WEAKER CASH FLOW AS COMMODITY PRICES FALL Commodity prices experienced a slight drop in 9M 2012, which contributed to weaker cash flow. Despite this weakness, the industry remained at or near the top of the cycle conditions. However, one notable exception was the natural gas market in North America, which remained at depressed levels impacting a few major dry gas operators. CAPEX SIGNIFICANTLY INCREASED increased significantly over the past year as the industry has invested heavily in higher cost, unconventional plays such as offshore drilling and shale oil and gas fracking. This substantial investment should help drive future production growth. KEY RATIOS WEAKEN BUT REMAIN STRONG Free cash flow deficits expanded for the first time post-recession, contributing to higher debt as many operators in the industry relaxed their tight financial discipline. This weakened key ratios for the sector OUTLOOK: CREDIT QUALITY PARKED IN NEUTRAL DBRS expects free cash flow deficits to remain at or near current levels and further deterioration of balance sheets to continue. However, DBRS does not expect this to result in a material impact on credit quality. 6

7 Aggregate Data Tables 7

8 Operating Cash Flow Operating Cash Flow 600, ,000 In millions of USD 400, , , , CASH FLOW REMAINS NEAR PEAK LEVELS Cash flow has made a full recovery from recessionary lows in Rising market prices and ramped-up production have enabled strong cash flow performances. Slight weakness in 9M 2012 was largely driven by a weaker pricing environment, especially from North American natural gas producers. 8

9 2013 Change in In millions of USD 500, , , , , , , , ,000 50, * In millions of USD 100, , , , , (20,000.00) (40,000.00) (60,000.00) 2013* * DBRS estimates MASSIVE CAPEX EXPANSION expansion has been on the rise for the past five years as virtually every operator has aggressively developed their growth strategy to increase production. Despite the recession, capex fell only slightly illustrating the difficulty of curtailing capex during market disruptions. The substantial increase in capex reflects the higher cost associated with future production development. CAPEX GROWTH EXPECTED TO BE FLAT IN 2013 DBRS expects capex to closely track cash flow trends. Given weak future growth prospects and a potentially challenging pricing environment, capex growth will likely be limited. Furthermore, current world oil production remains at record levels while demand growth remains minimal. As a result, cash flow growth could be impacted by these trends. 9

10 Change in In millions of USD 84,000 82,000 80,000 78,000 76,000 74,000 72,000 70,000 68,000 66,000 64, In millions of USD 10,000 7,500 5,000 2,500 0 (2,500) (5,000) (7,500) (10,000) DIVIDENDS YET TO RECOVER FROM PRE-RECESSIONARY LEVELS To contend with an uncertain economic climate, companies have been cautious in increasing dividends. In general, dividend cuts are used only as a last resort mechanism in order to preserve liquidity. This was illustrated during the last crisis when the most dramatic cuts did not occur until Note, the large drop in 2010 was attributed to BP p.l.c. s nearly $8 billion dividend cuts caused by the major oil spill in the Gulf of Mexico. 10

11 Dividend Payout Ratio Payout Ratio 30.0% % of Cash Flow paid as 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% NORMAL DIVIDEND PAYOUT RATIO IS 15% TO 20% Immediately following the recession, weaker cash flow and relatively flat dividends led to a leap in the ratio. Often during booming economic times, dividend growth tends to lag behind cash flow increases. As a result, a lower payout ratio could indicate strong market conditions. 11

12 to Depreciation Payout Ratio 350% 300% % of to Depreciation 250% 200% 150% 100% 50% 0% CAPEX HAS SIGNIFICANTLY OUTPACED DEPRECIATION The capex-to-depreciation ratio has been well in excess of 250% over the last six years. This higher level of capex, versus historical norms, has been driven by: (1) higher replacement costs with the transition from conventional to unconventional production and (2) growth in production volume as strong commodity prices have driven expansion into unconventional basins. 12

13 Gross Gross 60,000 40,000 In millions of USD 20,000 - (20,000) (40,000) (60,000) (80,000) CAPEX EXPANSION DRIVING CURRENT DEFICITS The deficit in 9M 2012, propelled by higher capex, led to free cash flow deficits that rivalled 2009 lows. In contrast to 2009, when deficits were caused by weaker cash flow, the 9M 2012 deficits were largely the result of increased capex, which should lead to future cash flow growth. 13

14 EBITDA Interest Coverage EBITDA Interest Coverage No. of times Interest is Covered by Earnings COVERAGE RATIOS REMAIN AT CYCLE HIGHS Persistently low interest rates and strong earnings have led to top-of-the cycle, high interest coverage. However, should interest rates climb to historical norms (approximately 6%), this ratio is likely to weaken significantly, particularly for companies with higher leverage. 14

15 Adjusted Debt in Capital Structure Adjusted Debt in Capital Stucture 40.0% % of Debt in Capital Structure 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% SLIGHT UPTICK IN LEVERAGE For the sector, leverage ratios have remained healthy (30% to 40%). The slight uptick in leverage in 9M 2012 was attributable to higher capex levels, but ratios have remained well within the healthy range. 15

16 Adjusted Debt to Cash Flow Adjusted Debt to Cash Flow Times DEBT TO CASH FLOW WEAKENED IN 9M 2012 As debt levels increased to finance capex initiatives and cash flow decreased due to lower commodity prices in 9M 2012, the debt-to-cash flow ratio weakened substantially. 16

17 Company Financial Profile Rankings 17

18 of Results The following section outlines DBRS s ranking of the financial profiles of 100 oil and gas companies. Financial profiles are assessed as follows: Outstanding, Excellent, Good and Satisfactory. In determining these assessments, DBRS used the following criteria: 1) CASH FLOW FROM OPERATIONS DBRS used cash flow from operations as a measure of size to determine the relative ranking. 2) FREE CASH FLOW/CASH FLOW FROM OPERATIONS This ratio measures whether the free cash flow surplus (or deficit) is significant in comparison to the operating cash flow. The higher the ratio, the more financial flexibility the company has. 3) TOTAL DEBT/CASH FLOW FROM OPERATIONS This ratio represents the number of years a company will take to pay off total debt, given the current cash flow from operations. The lower the ratio, the faster the ability to service debt. 4) TOTAL DEBT IN CAPITAL STRUCTURE This ratio measures a company s leverage position. A low percentage of debt is highly desirable from a credit rating perspective. 5) EBITDA INTEREST COVERAGE RATIO This ratio measures a company s earnings power to cover its financing payments. A high ratio indicates that the company has a greater ability to pay its interest expenses. 6) CAPEX/DEPRECIATION This ratio reflects the degree to which a company is maintaining or expanding its operations. When the ratio is lower than 1.0, future cash flow growth may be limited. A high ratio indicates an aggressive expansion strategy. 7) CAPEX/CASH FLOW FROM OPERATIONS This ratio is used to measure a company s ability to fund its capex with internally generated cash flow. 8) DIVIDENDS PAYOUT RATIO This ratio measures the degree of aggressiveness with which a company pays dividends. 18

19 Company Financial Profile Rankings The study identified that larger companies generally had stronger financial profiles than smaller companies. Financial Profile Ranking # Company Name Rating Satisfactory Good Excellent Outstanding 1 Exxon Mobil Corporation 2 Chevron Corporation AA 3 Occidental Petroleum Corporation A 4 Crescent Point Energy Corp. 5 Royal Dutch Shell plc 6 Husky Energy Inc. A (low) 7 Apache Corporation 8 Statoil ASA 9 ConocoPhillips A 10 BP p.l.c. A 11 Eni S.p.A. 12 PetroChina Company Limited 13 Suncor Energy Inc. A (low) 14 Total S.A. and Subsidiaries AA 15 Marathon Oil Corporation 16 Imperial Oil Limited AA (high) 17 Pacific Rubiales Energy Corp. 18 Canadian Oil Sands Limited BBB 19 Murphy Oil Corporation 20 Canadian Natural Resources Limited BBB (high) BBB (high) 21 Cenovus Energy Inc. A (low) 22 Cimarex Energy Co. 23 Anadarko Petroleum Corporation BBB 19

20 Financial Profile Ranking # Company Name Rating Satisfactory Good Excellent Outstanding 24 ARC Resources Ltd. 25 Petróleo Brasileiro S.A. 26 EOG Resources, Inc. 27 Hess Corporation 28 MDU Resources Group, Inc. 29 Penn West Exploration 30 Devon Energy Corporation BBB (high) 31 QEP Resources, Inc. 32 Southwestern Energy Company 33 Nexen Inc. BBB 34 Encana Corporation BBB 35 Talisman Energy Inc. BBB (high) 36 Petrominerales Ltd. 37 Vermilion Energy Inc. BB (low) 38 Baytex Energy Corp. 39 Whiting Petroleum Corporation 40 Parex Resources Inc. 41 W&T Offshore 42 Twin Butte Energy Ltd. 43 WPX Energy, Inc. 44 Noble Energy, Inc. 45 National Fuel Gas Company 46 Pioneer Natural Resources Co. 47 TransGlobe Energy Corporation 48 Bonavista Energy Corporation 49 PetroBakken Energy Ltd. 20

21 Financial Profile Ranking # Company Name Rating Satisfactory Good Excellent Outstanding 50 Tourmaline Oil Corp. 51 Denbury Resources Inc. 52 Energen Corporation 53 Chesapeake Energy Corporation 54 Cequence Energy Ltd. 55 Continental Resources 56 Concho Resources Inc. 57 Crew Energy Inc. 58 Stone Energy Corporation 59 Bonterra Energy Corp. 60 Newfield Exploration Company 61 Trilogy Energy Corp. B 62 Pengrowth Energy Corporation 63 Cabot Oil & Gas Corporation 64 Legacy Oil + Gas Inc. 65 Plains Exploration and Production Company 66 Enerplus Corporation 67 Chinook Energy Inc. 68 SM Energy Company 69 Gran Tierra Energy Inc. 70 Whitecap Resources Inc. 71 Rosetta Resources Inc. 72 NuVista Energy Ltd. 73 Surge Energy Inc. 74 Peyto Exploration & Development Corp. 75 Range Resources Corporation 21

22 Financial Profile Ranking # Company Name Rating Satisfactory Good Excellent Outstanding 76 Gulfport Energy Corporation 77 Painted Pony Petroleum Ltd. 78 Harvest Operations Corp. 79 Northern Oil & Gas, Inc. 80 Sandridge Energy, Inc. 81 Ultra Petroleum Corp. 82 Birchcliff Energy Ltd. 83 EXCO Resources, Inc. 84 Berry Petroleum Company 85 Bill Barrett Corporation 86 Laredo Petroleum Holdings, Inc. 87 McMoRan Exploration Co. 88 Connacher Oil and Gas Limited 89 LINN Energy, LLC 90 Oasis Petroleum Inc. 91 Perpetual Energy Inc. 92 Americas Petrogas Inc. 93 Kosmos Energy Ltd. 94 MEG Energy Corp. 95 Kodiak Oil & Gas Corp. 96 Paramount Resources Ltd. 97 Forest Oil Corporation 98 Quicksilver Resources Inc. 99 Southern Pacific Resource Corp. B (low) 100 Athabasca Oil Corporation B 22

23 Company Financial Profile Rankings Grouping The study identified that larger companies generally had a stronger financial profile than smaller companies. Company Financial Profile Rankings Ranked by Cash Flow # Company Name Cash Flow in $ Millions Liquidity Rating 1 Exxon Mobil Corporation 49,061 Outstanding 2 PetroChina Company Limited 46,462 Outstanding 3 Royal Dutch Shell plc 40,983 Outstanding 4 Chevron Corporation 36,530 Outstanding 5 Petróleo Brasileiro S.A. 33,200 Outstanding 6 BP p.l.c. 30,222 Outstanding 7 Total S.A. and Subsidiaries 28,706 Outstanding 8 Statoil ASA 22,029 Outstanding 9 Eni S.p.A. 19,460 Outstanding 10 ConocoPhillips 18,276 Outstanding 11 Occidental Petroleum Corporation 12,375 Outstanding 12 Suncor Energy Inc. 10,160 Outstanding 13 Apache Corporation 10,106 Outstanding 14 Anadarko Petroleum Corporation 7,364 Outstanding 15 Canadian Natural Resources Limited 6,498 Outstanding 16 Hess Corporation 5,408 Excellent 17 EOG Resources, Inc. 5,311 Outstanding 18 Devon Energy Corporation 5,271 Excellent 19 Husky Energy Inc. 4,671 Outstanding 20 Imperial Oil Limited 4,567 Outstanding 21 Marathon Oil Corporation 4,382 Outstanding 22 Chesapeake Energy Corporation 4,160 Very Good 23 Cenovus Energy Inc. 3,706 Outstanding 24 Encana Corporation 3,496 Excellent 25 Murphy Oil Corporation 3,103 Outstanding 26 Talisman Energy Inc. 2,690 Excellent 27 Noble Energy Inc. 2,548 Excellent 28 Nexen Inc. 2,377 Excellent 29 Pioneer Natural Resources Company 2,067 Excellent 30 Southwestern Energy Company 1,596 Excellent 23

24 Liquidity Ratings Ranked by Cash Flow # Company Name Cash Flow in $ Millions Liquidity Rating 31 Continental Resources Inc. 1,556 Very Good 32 Crescent Point Energy Corp. 1,532 Outstanding 33 Canadian Oil Sands Limited 1,526 Outstanding 34 Pacific Rubiales Energy Corp. 1,508 Outstanding 35 Denbury Resources Inc. 1,437 Excellent 36 Newfield Exploration Company 1,412 Very Good 37 QEP Resources, Inc. 1,294 Excellent 38 Whiting Petroleum Corporation 1,286 Excellent 39 Penn West Exploration 1,278 Excellent 40 Concho Resources Inc. 1,269 Very Good 41 Plains Exploration and Production Co. 1,213 Very Good 42 Cimarex Energy Co. 1,145 Outstanding 43 WPX Energy, Inc. 959 Excellent 44 SM Energy Company 911 Very Good 45 Ultra Petroleum Corp. 822 Satisfactory 46 SandRidge Energy, Inc. 806 Satisfactory 47 Energen Resources, Inc. 791 Excellent 48 ARC Resources Ltd. 709 Outstanding 49 MDU Resources Group, Inc. 684 Excellent 50 Petrominerales Ltd. 658 Excellent 51 PetroBakken Energy Ltd. 647 Excellent 52 National Fuel Gas Company 626 Excellent 53 Range Resources Corporation 626 Very Good 54 Stone Energy Corporation 567 Very Good 55 Enerplus Corporation 566 Very Good 56 Cabot Oil & Gas Corporation 544 Very Good 57 Baytex Energy Corp. 534 Excellent 58 Vermilion Energy Inc. 528 Excellent 59 W&T Offshore 518 Excellent 60 Berry Petroleum Company 488 Satisfactory 61 Pengrowth Energy Corporation 486 Very Good 62 Bonavista Energy Corporation 429 Excellent 63 EXCO Resources, Inc. 428 Satisfactory 64 Bill Barrett Corporation 415 Satisfactory 65 Forest Oil Corporation 388 Satisfactory 24

25 Liquidity Ratings Ranked by Cash Flow # Company Name Cash Flow in $ Millions Liquidity Rating 66 Rosetta Resources Inc. 377 Very Good 67 Oasis Petroleum Inc. 369 Satisfactory 68 Laredo Petroleum Holdings, Inc. 365 Satisfactory 69 Harvest Operations Corp. 356 Satisfactory 70 Gran Tierra Energy Inc. 298 Very Good 71 Kosmos Energy Ltd. 292 Satisfactory 72 Peyto Exploration & Development Corp. 280 Very Good 73 MEG Energy Corp. 277 Satisfactory 74 Tourmaline Oil Corp. 258 Excellent 75 Parex Resources Inc. 252 Excellent 76 Kodiak Oil & Gas Corp. 229 Satisfactory 77 LINN Energy, LLC 222 Satisfactory 78 Trilogy Energy Corp. 221 Very Good 79 Legacy Oil + Gas Inc. 218 Very Good 80 Crew Energy Inc. 197 Very Good 81 Gulfport Energy Corporation 197 Satisfactory 82 Northern Oil & Gas, Inc. 193 Satisfactory 83 Quicksilver Resources Inc. 179 Satisfactory 84 Whitecap Resources Inc. 159 Very Good 85 TransGlobe Energy Corporation 130 Excellent 86 Twin Butte Energy Ltd. 111 Excellent 87 Birchcliff Energy Ltd. 109 Satisfactory 88 McMoRan Exploration Co. 97 Satisfactory 89 Connacher Oil and Gas Limited 95 Satisfactory 90 Surge Energy Inc. 90 Very Good 91 NuVista Energy Ltd. 90 Very Good 92 Bonterra Energy Corp. 81 Very Good 93 Chinook Energy Inc. 63 Very Good 94 Southern Pacific Resource Corp. 45 Satisfactory 95 Perpetual Energy Inc. 42 Satisfactory 96 Painted Pony Petroleum Ltd. 38 Satisfactory 97 Paramount Resources Ltd. 31 Satisfactory 98 Cequence Energy Ltd. 23 Very Good 99 Americas Petrogas Inc. 8 Satisfactory 100 Athabasca Oil Corporation (61) Satisfactory 25

26 Company List 26

27 Financial Profile Tables of Individual Companies The following section outlines 100 financial profiles focusing specifically on individual company trends. DBRS focused on the following four trends: 1) OVERALL STRENGTH The overall strength of a company s financial profile was determined using the following ratios: (a) adjusted total debt in capital structure, (b) adjusted total debt by cash flow and (c) EBITDA interest coverage. 2) FREE CASH FLOW Typically, companies with higher free cash flow tend to have stronger financial profiles as well as greater financial flexibility. 3) CAPEX Typically, companies with higher capex levels, period over period, tend to be growing, which may or may not impact their financial profile. In certain circumstances, capex can be financed through internal cash flow, while in other cases capex may need to be financed externally. 4) DIVIDENDS In general, companies with steadily growing dividends are more likely to have stronger financial profiles. However, significant dividend distribution over the long term could erode a company s credit quality. GUIDE TO SUMMARY TABLE The company had a positive impact in this criterion in comparison to last year. The company had a negative impact in this criterion in comparison to last year. The company had an increase in capex or dividends. The company had a decrease in capex or dividends. - There was no change between one year to the next. NMF Not meaningful. 27

28 Ranking Company Name Rating Americas Petrogas Inc. - Anadarko Petroleum Corporation BBB Apache Corporation - ARC Resources Ltd. - Athabasca Oil Corporation B NMF NMF NMF NMF Baytex Energy Corp. - Berry Petroleum Company - Bill Barrett Corporation - Birchcliff Energy Ltd. - Bonavista Energy Corporation - Bonterra Energy Corp. - BP p.l.c. A Cabot Oil & Gas Corporation - Canadian Natural Resources Limited BBB (high) Canadian Oil Sands Limited BBB Cenovus Energy Inc. A (low) Cequence Energy Ltd. - Chesapeake Energy Corporation - Chevron Corporation AA Chinook Energy Inc. - Cimarex Energy Co. - Concho Resources Inc. - Connacher Oil and Gas Limited - ConocoPhillips A 28

29 Company Name Rating Continental Resources Inc. - Crescent Point Energy Corp. - Crew Energy Inc. - Denbury Resources Inc. - Devon Energy Corporation BBB (high) Encana Corporation BBB Energen Corporation - Enerplus Corporation - Eni S.p.A. - EOG Resources, Inc. - EXCO Resources, Inc. - Exxon Mobil Corporation - Forest Oil Corporation - Gran Tierra Energy Inc. - NMF NMF Gulfport Energy Corporation - Harvest Operations Corp. - Hess Corporation - Husky Energy Inc. A (low) Imperial Oil Limited AA (high) Kodiak Oil & Gas Corp. - Kosmos Energy Ltd. - NMF NMF Laredo Petroleum Holdings, Inc. - NMF - Legacy Oil + Gas Inc. - LINN Energy, LLC - Marathon Oil Corporation - 29

30 Company Name Rating McMoRan Exploration Co. - MDU Resources Group, Inc. - MEG Energy Corp. - - Murphy Oil Corporation BBB (high) National Fuel Gas Company - Newfield Exploration Company - Nexen Inc. BBB Noble Energy, Inc. - Northern Oil and Gas, Inc. - NuVista Energy Ltd. - Oasis Petroleum Inc. - NMF Occidental Petroleum Corporation A Pacific Rubiales Energy Corp. - Painted Pony Petroleum Ltd. - NMF Paramount Resources Ltd. - Parex Resources Inc. - NMF NMF Pengrowth Energy Corporation - Penn West Exploration - Perpetual Energy Inc. - PetroBakken Energy Ltd. - Petróleo Brasileiro S.A. - PetroChina Company Limited - Petrominerales Ltd. - Peyto Exploration & Development Corp. - Pioneer Natural Resources Co. - 30

31 Company Name Rating Plains Exploration & Production Co. - QEP Resources, Inc. - Quicksilver Resources Inc. - Range Resources Corporation - Rosetta Resources Inc. - Royal Dutch Shell plc - SandRidge Energy, Inc. - SM Energy Company - Southern Pacific Resource Corp. B (low) NMF Southwestern Energy Company - Statoil ASA - Stone Energy Corporation - Suncor Energy Inc. A (low) Surge Energy Inc. - Talisman Energy Inc. BBB (high) Total S.A. and Subsidiaries AA Tourmaline Oil Corp. - TransGlobe Energy Corporation - Trilogy Energy Corp. B Twin Butte Energy Ltd. - Ultra Petroleum Corp. - Vermilion Energy Inc. BB (low) W&T Offshore - Whitecap Resources Inc. - Whiting Petroleum Corporation - WPX Energy, Inc. - NMF 31

32 Ranking Company Name Rating Americas Petrogas Inc. - Anadarko Petroleum Corporation BBB Apache Corporation - ARC Resources Ltd. - Athabasca Oil Corporation B Baytex Energy Corp. - Berry Petroleum Company - Bill Barrett Corporation - Birchcliff Energy Ltd. - Bonavista Energy Corporation - Bonterra Energy Corp. - BP p.l.c. A Cabot Oil & Gas Corporation - Canadian Natural Resources Limited BBB (high) Canadian Oil Sands Limited BBB Cenovus Energy Inc. A (low) Cequence Energy Ltd. - Chesapeake Energy Corporation - Chevron Corporation AA Chinook Energy Inc. - Cimarex Energy Co. - Concho Resources Inc. - Connacher Oil and Gas Limited - 32

33 Company Name Rating ConocoPhillips A Continental Resources Inc. - Crescent Point Energy Corp. - Crew Energy Inc. - Denbury Resources Inc. - Devon Energy Corporation BBB (high) Encana Corporation BBB Energen Corporation - Enerplus Corporation - Eni S.p.A. - EOG Resources, Inc. - EXCO Resources, Inc. - Exxon Mobil Corporation - Forest Oil Corporation - Gran Tierra Energy Inc. - Gulfport Energy Corporation - Harvest Operations Corp. - Hess Corporation - Husky Energy Inc. A (low) Imperial Oil Limited AA (high) Kodiak Oil & Gas Corp. - Kosmos Energy Ltd. - Laredo Petroleum Holdings, Inc. - - Legacy Oil + Gas Inc. - - LINN Energy, LLC - 33

34 34 Company Name Rating Marathon Oil Corporation - McMoRan Exploration Co. - MDU Resources Group, Inc. - MEG Energy Corp. - Murphy Oil Corporation BBB (high) National Fuel Gas Company - Newfield Exploration Company - Nexen Inc. BBB Noble Energy, Inc. - Northern Oil & Gas, Inc. - NuVista Energy Ltd. - Oasis Petroleum Inc. - Occidental Petroleum Corporation A Pacific Rubiales Energy Corp. - Painted Pony Petroleum Ltd. - Paramount Resources Ltd. - Parex Resources Inc. - Pengrowth Energy Corporation - Penn West Exploration - Perpetual Energy Inc. - PetroBakken Energy Ltd. - Petróleo Brasileiro S.A. - PetroChina Company Limited - Petrominerales Ltd. - Peyto Exploration & Development Corp. - Pioneer Natural Resources Co. -

35 Company Name Rating Plains Exploration & Production Co. - QEP Resources, Inc. - Quicksilver Resources Inc. - Range Resources Corporation - Rosetta Resources Inc. - Royal Dutch Shell plc - SandRidge Energy, Inc. - SM Energy Company - Southern Pacific Resource Corp. B (low) Southwestern Energy Company - Statoil ASA - Stone Energy Corporation - Suncor Energy Inc. A (low) Surge Energy Inc. - Talisman Energy Inc. BBB (high) Total S.A. and Subsidiaries AA Tourmaline Oil Corp. - TransGlobe Energy Corporation - Trilogy Energy Corp. B Twin Butte Energy Ltd. - Ultra Petroleum Corp - Vermilion Energy Inc. BB (low) W&T Offshore - Whitecap Resources Inc. - Whiting Petroleum Corporation - WPX Energy, Inc. - 35

36 Ranking Rating Americas Petrogas Inc. - Anadarko Petroleum Corporation BBB Apache Corporation - ARC Resources Ltd. - Athabasca Oil Corporation B Baytex Energy Corp. - Berry Petroleum Company - Bill Barrett Corporation - Birchcliff Energy Ltd. - Bonavista Energy Corporation - Bonterra Energy Corp. - BP p.l.c. A Cabot Oil & Gas Corporation - Canadian Natural Resources Limited BBB (high) Canadian Oil Sands Limited BBB Cenovus Energy Inc. A (low) Cequence Energy Ltd. - Chesapeake Energy Corporation - Chevron Corporation AA Chinook Energy Inc. - Cimarex Energy Co. - Concho Resources Inc. - Connacher Oil and Gas Limited - ConocoPhillips A 36

37 Rating Continental Resources Inc. - Crescent Point Energy Corp. - Crew Energy Inc. - Denbury Resources Inc. - Devon Energy Corporation BBB (high) Encana Corporation BBB Energen Corporation - Enerplus Corporation - Eni S.p.A. - EOG Resources, Inc. - EXCO Resources, Inc. - Exxon Mobil Corporation - Forest Oil Corporation - Gran Tierra Energy Inc. - Gulfport Energy Corporation - Harvest Operations Corp. - Hess Corporation - Husky Energy Inc. A (low) Imperial Oil Limited AA (high) Kodiak Oil & Gas Corp. - Kosmos Energy Ltd. - Laredo Petroleum Holdings, Inc. - - Legacy Oil + Gas Inc. - LINN Energy, LLC - Marathon Oil Corporation - 37

38 38 Rating McMoRan Exploration Co. - MDU Resources Group, Inc - MEG Energy Corp. - Murphy Oil Corporation BBB (high) National Fuel Gas Company - Newfield Exploration Co - Nexen Inc. BBB Noble Energy, Inc. - Northern Oil & Gas, Inc. - NuVista Energy Ltd. - Oasis Petroleum Inc. - Occidental Petroleum Corporation A Pacific Rubiales Energy Corp. - Painted Pony Petroleum Ltd. - Paramount Resources Ltd. - Parex Resources Inc. - Pengrowth Energy Corporation - Penn West Exploration - Perpetual Energy Inc. - PetroBakken Energy Ltd. - Petróleo Brasileiro S.A. - PetroChina Company Limited - Petrominerales Ltd. - Peyto Exploration & Development Corp. - Pioneer Natural Resources Co. - Plains Exploration & Production Co. -

39 Rating QEP Resources, Inc. - Quicksilver Resources Inc. - Range Resources Corporation - Rosetta Resources Inc. - Royal Dutch Shell plc - SandRidge Energy, Inc. - SM Energy Company - Southern Pacific Resource Corp. B (low) Southwestern Energy Company - Statoil ASA - Stone Energy Corporation - Suncor Energy Inc. A (low) Surge Energy Inc. - Talisman Energy Inc. BBB (high) Total S.A. and Subsidiaries AA Tourmaline Oil Corp. - TransGlobe Energy Corporation - Trilogy Energy Corp. B Twin Butte Energy Ltd. - Ultra Petroleum Corp - Vermilion Energy Inc. BB (low) W&T Offshore - Whitecap Resources Inc. - Whiting Petroleum Corporation - WPX Energy, Inc. - 39

40 Ranking Company Name Rating Americas Petrogas Inc Anadarko Petroleum Corporation BBB Apache Corporation - ARC Resources Ltd. - - Athabasca Oil Corporation B Baytex Energy Corp. - Berry Petroleum Company - - Bill Barrett Corporation Birchcliff Energy Ltd Bonavista Energy Corporation - Bonterra Energy Corp. - BP p.l.c. A Cabot Oil & Gas Corporation Canadian Natural Resources Limited BBB (high) Canadian Oil Sands Limited BBB Cenovus Energy Inc. A (low) Cequence Energy Ltd Chesapeake Energy Corporation - Chevron Corporation AA Chinook Energy Inc Cimarex Energy Co. - - Concho Resources Inc Connacher Oil and Gas Limited ConocoPhillips A

41 Company Name Rating Continental Resources Inc Crescent Point Energy Corp. - Crew Energy Inc Denbury Resources Inc Devon Energy Corporation BBB (high) Encana Corporation BBB - Energen Corporation - Enerplus Corporation - Eni S.p.A. - EOG Resources, Inc. - EXCO Resources, Inc. - - Exxon Mobil Corporation - Forest Oil Corporation Gran Tierra Energy Inc Gulfport Energy Corporation Harvest Operations Corp Hess Corporation Husky Energy Inc. A (low) Imperial Oil Limited AA (high) Kodiak Oil & Gas Corp Kosmos Energy Ltd Laredo Petroleum Holdings, Inc Legacy Oil + Gas Inc LINN Energy, LLC - Marathon Oil Corporation - 41

42 Company Name Rating McMoRan Exploration Co. - MDU Resources Group, Inc. - MEG Energy Corp Murphy Oil Corporation BBB (high) National Fuel Gas Company - Newfield Exploration Company Nexen Inc. BBB Noble Energy, Inc. - Northern Oil & Gas, Inc NuVista Energy Ltd. - - Oasis Petroleum Inc Occidental Petroleum Corporation A Pacific Rubiales Energy Corp. - - Painted Pony Petroleum Ltd Paramount Resources Ltd Parex Resources Inc Pengrowth Energy Corporation - Penn West Exploration - Perpetual Energy Inc. - PetroBakken Energy Ltd. - Petróleo Brasileiro S.A. - PetroChina Company Limited - Petrominerales Ltd. - Peyto Exploration & Development Corp. - Pioneer Natural Resources Co Plains Exploration & Production Co

43 Company Name Rating QEP Resources, Inc. - Quicksilver Resources Inc Range Resources Corporation Rosetta Resources Inc Royal Dutch Shell plc - SandRidge Energy, Inc. - SM Energy Company Southern Pacific Resource Corp. B (low) Southwestern Energy Company Statoil ASA - Stone Energy Corporation Suncor Energy Inc. A (low) Surge Energy Inc Talisman Energy Inc. BBB (high) Total S.A. and Subsidiaries AA Tourmaline Oil Corp TransGlobe Energy Corporation Trilogy Energy Corp. B - Twin Butte Energy Ltd Ultra Petroleum Corp Vermilion Energy Inc. BB (low) W&T Offshore - Whitecap Resources Inc Whiting Petroleum Corporation - - WPX Energy, Inc

44 Americas Petrogas Inc. Americas Petrogas Inc. is a Canadian oil and gas exploration and production company with assets in Argentina and Peru. Its oil and gas exploration, production and development activities are in Argentina s most prolific hydrocarbon basin of Neuquén. Financial Profile Americas Petrogas Inc. Net income before extraordinary items (16) (17) (11) (1) (3) Depreciation, depletion & amortization Deferred income taxes and other (5) 0 Cash flow (before working cap. changes) 8 (4) (4) (6) (3) paid Capital and exploration expenditures (73) (29) (21) (5) (15) (bef. work. cap. changes) (64) (33) (25) (11) (18) Changes in non-cash work. cap. items (6) 3 (3) 0 (0) Net (70) (30) (27) (11) (18) Acquisitions & Long-term Investments (0) (1) Short-term Investments 0 (27) (0) 0 0 Proceeds on asset sales Net equity change Net debt change 0 (3) Other (0) (2) (2) 13 (1) Change in cash 3 (12) 30 7 (4) Total debt Cash and equivalents Adj. total debt in capital structure* 1.0% 13.5% 10.8% 3.4% 0.0% Adj. total debt/cash flow (times)* 0.21 (5.28) (2.49) (0.29) 0.00 EBITDA interest coverage (47.86) (102.99) NMF. NMF

45 Anadarko Petroleum Corporation RATING: BBB; Stable Anadarko Petroleum Corporation (Anadarko) is a large, diversified oil and gas producer. The majority of Anadarko s assets are located in the United States, representing about 90% of total proved reserves. Financial Profile Anadarko Petroleum Corporation Net income before extraordinary items 2,259 2, ,845 Depreciation, depletion & amortization 3,864 3,830 3,714 3,532 3,194 Deferred income taxes and other 1,241 1, Cash flow (before working cap. changes) 7,364 7,178 5,357 4,054 5,473 paid (182) (181) (180) (176) (170) Capital and exploration expenditures (6,988) (5,650) (5,008) (4,352) (4,801) (bef. work. cap. changes) 194 1, (475) 502 Changes in non-cash work. cap. items (16) (743) (133) (432) 617 Net (907) 1,119 Acquisitions & Long-term Investments 0 (802) Short-term Investments Proceeds on asset sales ,455 Net equity change 5 (11) 65 1,337 (651) Net debt change 1,272 2,289 (280) 365 (2,421) Other (3,330) (3,618) Change in cash (955) (983) 149 1,171 1,092 Total debt 14,141 15,230 13,013 12,748 12,339 Cash and equivalents 2,532 2,697 3,680 3,531 2,360 Adj. total debt in capital structure* 46.1% 50.6% 44.8% 47.6% 50.4% Adj. total debt/cash flow (times)* EBITDA interest coverage

46 Apache Corporation Apache Corporation is a Texas-based independent oil and gas company with exploration and production interests in the Gulf of Mexico, Gulf Coast Onshore in the United States, western Canada and the United Kingdom. Financial Profile Apache Corporation Net income before extraordinary items 4,050 4,706 3,151 1,695 4,312 Depreciation, depletion & amortization 6,875 4,204 3,083 5,213 7,850 Deferred income taxes and other (819) 1,324 1,134 (1,923) (4,786) Cash flow (before working cap. changes) 10,106 10,234 7,368 4,985 7,376 paid (322) (306) (226) (209) (239) Capital and exploration expenditures (8,821) (7,078) (4,922) (3,632) (5,823) (bef. work. cap. changes) 963 2,850 2,220 1,144 1,314 Changes in non-cash work. cap. items (902) (281) (642) (761) (311) Net 61 2,569 1, ,003 Acquisitions & Long-term Investments (4,531) (1,813) (8,360) (310) (150) Short-term Investments (792) Proceeds on asset sales Net equity change ,555 (70) 31 Net debt change 4,433 (925) 1, Other (529) (144) (102) (79) (41) Change in cash (268) 161 (1,914) 867 1,055 Total debt 11,634 7,216 8,141 5,067 4,922 Cash and equivalents ,048 1,973 Adj. total debt in capital structure* 29.8% 22.9% 26.6% 26.6% 25.0% Adj. total debt/cash flow (times)* EBITDA interest coverage

47 ARC Resources Ltd. ARC Resources Ltd. is a Canadian conventional oil and gas company. It currently operates in western Canada, holding interests in petroleum and natural gas properties and assets. Financial Profile ARC Resources Ltd. Net income before extraordinary items Depreciation, depletion & amortization Deferred income taxes and other (48) (39) (9) Cash flow (before working cap. changes) paid (239) (239) (237) (242) (459) Capital and exploration expenditures (612) (728) (589) (359) (548) (bef. work. cap. changes) (141) (156) (152) (92) (83) Changes in non-cash work. cap. items (34) (39) 65 Net (174) (83) (131) (132) (18) Acquisitions & Long-term Investments (55) (58) (9) (191) (51) Short-term Investments Proceeds on asset sales (0) Net equity change Net debt change 134 (52) (112) Other (19) 22 8 (5) (2) Change in cash 232 (1) 2 (40) 33 Total debt Cash and equivalents Adj. total debt in capital structure* 20.8% 20.8% 21.6% 27.0% 30.6% Adj. total debt/cash flow (times)* EBITDA interest coverage

48 Athabasca Oil Corporation RATING: B; Stable Athabasca Oil Corporation is an Alberta-based company focused on the sustainable development of oil sands in the Athabasca region in northeastern Alberta and light oil resources in northwestern Alberta. Financial Profile - Athabasca Oil Corporation Net income before extraordinary items (86) (74) (36) (76) (25) Depreciation, depletion & amortization Deferred income taxes and other (90) 2 Cash flow (before working cap. changes) (61) (34) (21) (165) (22) paid Capital and exploration expenditures (983) (594) (178) (59) (113) (bef. work. cap. changes) (1,044) (628) (199) (224) (135) Changes in non-cash work. cap. items (128) Net (913) (539) (327) (103) (133) Acquisitions & Long-term Investments 0 0 (11) 0 0 Short-term Investments (1,310) 146 (146) Proceeds on asset sales , Net equity change 1 (16) 1, Net debt change (468) Other (44) (49) (1,355) (28) (118) Change in cash (743) (45) Total debt Cash and equivalents 601 1,224 1, Adj. total debt in capital structure* 0.8% 13.6% 13.4% 70.6% 52.0% Adj. total debt/cash flow (times)* (0.40) (14.49) (22.42) (2.50) (17.70) EBITDA interest coverage (3.86) (1.55) (0.85) (0.23) (0.59) NMF NMF NMF NMF

49 Baytex Energy Corp. Baytex Energy Corp. is a conventional Canadian oil and gas company operating mainly in the Western Canadian Sedimentary Basin. The company has a growing presence in the United States, offering heavy oil, light oil and natural gas liquids. Financial Profile Baytex Energy Corp. Net income before extraordinary items Depreciation, depletion & amortization Deferred income taxes and other (74) 65 Cash flow (before working cap. changes) paid (209) (204) (189) (136) (195) Capital and exploration expenditures (433) (369) (240) (164) (185) (bef. work. cap. changes) (108) (12) Changes in non-cash work. cap. items (15) (3) (6) (7) 20 Net (123) (14) 22 (4) 111 Acquisitions & Long-term Investments (25) (196) (101) (133) (89) Short-term Investments Proceeds on asset sales Net equity change Net debt change (45) (33) Other (2) (24) (25) (6) 0 Change in cash (10) 10 0 Total debt Cash and equivalents Adj. total debt in capital structure* 33.4% 34.8% 31.2% 31.3% 34.8% Adj. total debt/cash flow (times)* EBITDA interest coverage

50 Berry Petroleum Company Berry Petroleum Company (Berry) is an independent energy company headquartered in Denver, Colorado, with operations in California, Texas, Colorado and Utah. Berry is engaged in the production, development, acquisition, exploitation and exploration of crude oil and natural gas. Financial Profile Berry Petroleum Company Net income before extraordinary items Depreciation, depletion & amortization Deferred income taxes and other (89) (65) Cash flow (before working cap. changes) paid (18) (17) (16) (14) (13) Capital and exploration expenditures (627) (527) (310) (135) (398) (bef. work. cap. changes) (156) (82) (15) Changes in non-cash work. cap. items (13) (6) 25 (44) 13 Net (170) (88) (1) Acquisitions & Long-term Investments (78) (158) (334) (13) (668) Short-term Investments Proceeds on asset sales Net equity change Net debt change (150) 698 Other (12) (25) (37) 104 (31) Change in cash 0 0 (5) 5 (0) Total debt 1,613 1,380 1,109 1,009 1,132 Cash and equivalents Adj. total debt in capital structure* 62.5% 62.4% 52.3% 59.3% 58.1% Adj. total debt/cash flow (times)* EBITDA interest coverage

51 Bill Barrett Corporation Bill Barrett Corporation is an oil and natural gas exploration and development company headquartered in Denver, Colorado. The company s assets are located in the resource-rich Rocky Mountain region, with active exploration and development properties located throughout the area.. Financial Profile Bill Barrett Corporation Net income before extraordinary items Depreciation, depletion & amortization Deferred income taxes and other Cash flow (before working cap. changes) paid Capital and exploration expenditures (1,008) (958) (449) (454) (573) (bef. work. cap. changes) (594) (485) 9 1 (153) Changes in non-cash work. cap. items 11 5 (11) 24 (18) Net (583) (480) (2) 26 (171) Acquisitions & Long-term Investments Short-term Investments Proceeds on asset sales (0) Net equity change Net debt change (5) (11) 153 Other (15) (16) (15) (8) (6) Change in cash (81) (1) 4 11 (17) Total debt 1, Cash and equivalents Adj. total debt in capital structure* 53.5% 42.4% 26.9% 29.2% 27.8% Adj. total debt/cash flow (times)* EBITDA interest coverage

52 Birchcliff Energy Ltd. Birchcliff Energy Ltd. is a Calgary-based intermediate oil and gas company that explores, develops and produces natural gas, light oil and natural gas liquids. The company s operations are concentrated in the Peace River Arch area of Alberta. Financial Profile Birchcliff Energy Ltd. Net income before extraordinary items (24) 23 Depreciation, depletion & amortization Deferred income taxes and other Cash flow (before working cap. changes) paid (1) Capital and exploration expenditures (348) (240) (230) (102) (237) (bef. work. cap. changes) (239) (111) (140) (35) (107) Changes in non-cash work. cap. items (12) (18) 20 Net (189) (71) (152) (53) (87) Acquisitions & Long-term Investments 0 (6) (2) 0 0 Short-term Investments Proceeds on asset sales Net equity change Net debt change (10) (43) Other (5) (1) 3 (5) (7) Change in cash (0) (5) 5 0 (0) Total debt Cash and equivalents Adj. total debt in capital structure* 33.2% 38.3% 37.0% 28.5% 31.3% Adj. total debt/cash flow (times)* EBITDA interest coverage

53 Bonavista Energy Corporation Bonavista Energy Corporation is a conventional oil and gas company with properties located in Alberta, British Columbia and Saskatchewan. Financial Profile Bonavista Energy Corporation Net income before extraordinary items Depreciation, depletion & amortization Deferred income taxes and other (53) 45 Cash flow (before working cap. changes) paid (151) (204) (251) (227) (330) Capital and exploration expenditures (409) (464) (349) (204) (306) (bef. work. cap. changes) (131) (97) (61) 5 (6) Changes in non-cash work. cap. items (21) (31) 18 (16) 84 Net (152) (128) (43) (11) 77 Acquisitions & Long-term Investments (76) (193) (285) (737) (187) Short-term Investments Proceeds on asset sales Net equity change Net debt change (227) (124) Other (24) (25) (7) 0 0 Change in cash Total debt 755 1, Cash and equivalents Adj. total debt in capital structure* 28.2% 45.5% 49.0% 33.8% 31.2% Adj. total debt/cash flow (times)* EBITDA interest coverage

54 Bonterra Energy Corp. Bonterra Energy Corp. is an oil and gas company headquartered in Calgary, Alberta, with an asset base of stable, producing properties across western Canada. Financial Profile Bonterra Energy Corp. Net income before extraordinary items Depreciation, depletion & amortization Deferred income taxes and other (39) (6) Cash flow (before working cap. changes) paid (61) (59) (47) (30) (54) Capital and exploration expenditures (81) (63) (77) (29) (30) (bef. work. cap. changes) (62) (25) (59) (25) (17) Changes in non-cash work. cap. items 4 14 (3) (8) 7 Net (57) (12) (62) (33) (10) Acquisitions & Long-term Investments (17) (14) Short-term Investments Proceeds on asset sales Net equity change Net debt change 56 (0) 34 (18) 27 Other (11) Change in cash Total debt Cash and equivalents Adj. total debt in capital structure* 45.8% 33.1% 32.4% 35.5% 63.0% Adj. total debt/cash flow (times)* EBITDA interest coverage

55 BP p.l.c. RATING: A; Stable BP p.l.c. is one of the world s largest integrated oil and gas companies, with significant production activities worldwide. It also ranks among the top refiners in terms of capacity. Financial Profile BP p.l.c. Net income before extraordinary items 19,214 23,768 21,909 17,560 22,334 Depreciation, depletion & amortization 11,934 11,135 11,164 12,106 10,985 Deferred income taxes and other (927) 656 (8,715) 1,199 (665) Cash flow (before working cap. changes) 30,222 35,560 24,357 30,866 32,653 paid (5,321) (4,072) (2,627) (10,483) (10,342) Capital and exploration expenditures (21,937) (17,845) (18,421) (20,650) (22,658) (bef. work. cap. changes) 2,964 13,643 3,309 (267) (347) Changes in non-cash work. cap. items 1,077 (4,263) (2,754) (3,596) 5,348 Net 4,041 9, (3,863) 5,001 Acquisitions & Long-term Investments (4,625) (11,821) (2,994) (741) (1,485) Short-term Investments Proceeds on asset sales 2,670 2,732 16,954 2, Net equity change (2,567) Net debt change 8,134 4,725 3,613 1,141 2,825 Other (12,267) (9,579) (8,080) 717 (68) Change in cash (1,956) (4,489) 10, ,635 Total debt 49,077 44,213 45,336 34,627 33,204 Cash and equivalents 16,041 14,067 18,556 8,339 8,197 Adj. total debt in capital structure* 38.4% 38.1% 40.9% 34.6% 38.6% Adj. total debt/cash flow (times)* EBITDA interest coverage