Participation in the highly volatile and capital-intensive exploration and production (E&P) industry; Moderate reserve size with a geographically diverse asset base; and Above-average profitability, despite somewhat high operating costs, due to high price realization for Alaskan gas. Moderate debt leverage with the company expected to remain cash flow positive. Track record of intense acquisition and divestiture activity as well as transfers to its parent, which could cause volatility in debt ratios. S&P Global Ratings' stable outlook on Hilcorp Energy I L.P. reflects the expectation that the partnership will maintain steady operating performance in its core regions while maintaining debt to EBITDA of 3x or less and funds from operations (FFO) to debt in excess of 30% on average over the
