PDVSA Positive Cash Flow Unlikely Without Price Recovery: S&P

PDVSA Positive Cash Flow Unlikely Without Price Recovery: S&P

Friday, January 29, 2016 11:45 pm
by Pietro D. Pitts
(Bloomberg) -- PDVSA will not be able to generate free operating cash flow (FOCF) due to estimated oil price for 2016 and 2017; expected stable oil and gas production; projected investment of $20b per year over next few years, S&P comments in research note.
NOTE: S&P doesn’t issue ratings change in note
S&P estimates WTI prices of $40/bbl for 2016 and $45/bbl for 2017
“We assess the company’s liquidity as ‘weak,’ mainly because we expect that its sources of cash will not be sufficient to cover its uses in the next 12 months”: S&P
PDVSA’s stand-alone financial risk profile is “highly leveraged”
“CCC” rating reflects possibility co. may default without unforeseen positive development over next 12 months: S&P
Pressure is growing for govt and related entities to reschedule some of its market debt or undertake liability management operation: S&P
Link to Company News:{PDVSA VC <Equity> CN <GO>}