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, relatively small reserve base, and highly leveraged financial profile. The rating also reflects good industry conditions and the company's significant hedging program. Hilcorp's proved reserve base is small, approximately 140 million barrels of oil equivalent (boe) based on midyear reserve reports and adjusted for subsequent acquisitions and divestitures. Reserves are split between gas (56%) and oil, and 70% are proved developed, located mainly in onshore southern Louisiana and Texas. Based on third-quarter annualized production, the company's reserve life is moderate, at 11 years. Standard&Poor's Ratings Services estimates that Hilcorp's all-in cost
