Fitch Updates Oil and Gas Price Decks

CHICAGO--(BUSINESS WIRE)--

Fitch Ratings has revised its price decks for both U.S. oil and natural gas, reflecting various market factors and underlying conditions.

Fitch has lowered its long-term (mid-cycle) Henry Hub natural gas price to $4.50/thousand cubic feet (mcf) from $5.00/mcf. This drop reflects limited catalysts for higher U.S. natural gas usage and the ongoing strength of shale-based liquids projects in North America, which has resulted in the treatment of associated gas as a by-product in a number of plays, allowing producers to tolerate lower all-in natural gas prices.

Fitch lowered 2012 HH base case prices to $2.75/mcf to reflect weak pricing seen YTD. While recent heat wave conditions have pushed electric generation usage up sharply this summer, this has been balanced against a very mild winter, which has led to average pricing of just $2.43/mcf as of the end of July.

Fitch has raised its 2012 base case West Texas Intermediate (WTI) to $92.50/barrel to reflect near-term market factors, and maintained its long-term base case price at $65/barrel.

Fitch's price deck intends to reflect a more conservative view of future price levels for modeling and rating purposes and for evaluating future commodity price expectations from a bondholder perspective. Fitch's price deck will often remain below current spot and future markets as a result. The price deck also reflects just supply/demand fundamentals, particularly the long-term price deck, with the recognition that near-term events can result in significant deviations from fundamental levels.

The full report 'Updating Fitch's Oil & Gas Price Deck' is available at 'www.fitchratings.com'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research: Updating Fitch's Oil and Gas Price Deck

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686362

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Fitch Updates Oil and Gas Price Decks