Cash flow generated at midcycle hydrocarbon prices would fund 100% of all reserve replacement capital expenditures; Disciplined hedging program protects cash flow; Proven history of low finding and development (F&D) costs and production enhancements; and Management team with extensive engineering and operating expertise. Volatile, fiercely competitive, cyclical, and capital-intensive industry; Highly leveraged capital structure; and Execution risk related to operating in geologically complex areas. The ratings on Hilcorp Energy I L.P. reflect a below-average business profile and aggressive financial leverage. Hilcorp is a privately held, small, petroleum limited partnership engaged in the acquisition, development, and production of crude oil and natural gas in Texas and South Louisiana. The cyclical and capital-intensive nature of the petroleum industry contributes to Hilcorp's below-average
