The ratings on Houston-based Hilcorp Energy I L.P. reflect the company's participation in the highly volatile and capital-intensive exploration and production (E&P) industry and high all-in cost structure. The ratings also incorporate the company's focused operational strategy and its adequate liquidity. Standard&Poor's Ratings Services deems Hilcorp's business risk profile to be weak. Hilcorp is a private partnership that acquires, develops, and produces crude oil and natural gas. Its reserve base is modest at approximately 172 million barrels of oil equivalent (boe) as of June 30, 2009. The company's reserve base, of which approximately 65% is developed and 64% natural gas, is located primarily in onshore southern Louisiana and Texas, and more recently the shallow water Gulf of Mexico.
