Management team with extensive engineering experience executes a focused operational strategy; and Large percentage of company-operated properties gives the company considerable control over property development decisions. Highly leveraged capital structure; High cost structure; and Volatile and capital-intensive industry. The rating on Hilcorp Energy I L.P., a private partnership that acquires, develops, and produces crude oil and natural gas, reflects the company's high all-in cost structure, highly leveraged financial profile, and volatile and capital-intensive industry. The rating also reflects the company's focused operational strategy, recently strong industry conditions, and large percentage of company-operated properties. Hilcorp's proved reserve base is small, approximately 150 million barrels of oil equivalent (boe) as of Dec. 31, 2007. Reserves are split between gas (59%) and oil
