Duke Energy Field Services Sr Unsec Debt Rated 'BBB' By Fitch.Business Editors NEW YORK--(BUSINESS WIRE)--Jan. 31, 2001 Fitch has assigned a `BBB' rating to Duke Energy Field Services LLC's (DEFS DEFS Duke Energy Field Services DEFS Direct-Applied Exterior Finish Systems (building construction) ) new $250 million 6 7/8% issue of senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. maturing Feb. 1, 2011. The new offering is a takedown Takedown 1. The price at which underwriters obtain securities to be offered to the public. 2. The portion of securities that each investment banker will distribute in a secondary or initial pubic offering. Notes: 1. from an existing $2 billion shelf registration. Proceeds from this offering will be used to pay down outstanding commercial paper. Fitch also affirmed DEFS's `F2' commercial paper rating. DEFS is the largest North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. gatherer of natural gas and producer of natural gas liquids (NGLs). DEFS was formed on Mar. 31, 2000, through the combination of the midstream gas businesses of Phillips Petroleum Company Phillips Petroleum Company was founded in 1917 by L.E. Phillips and Frank Phillips, of Bartlesville, Oklahoma. Their younger brother, Waite Phillips was the benefactor of Philmont Scout Ranch. Phillips Petroleum was headquartered in Bartlesville, Oklahoma. (`BBB' senior unsecured debt rating) and Duke Energy Corp. ('A+' senior unsecured debt rating). The ratings reflect the size and scope of DEFS's (the company) operations, a sound capital structure, the geographic diversity and favorable locations of its asset base and a balanced portfolio of gathering and processing contracts that provide an effective commodity price hedge. The company also benefits from the cash flow diversity provided by its participation in all facets of the midstream natural gas value chain. Currently, revenues and cash flow margins are highly dependent on realized prices for NGLs and not natural gas prices. Importantly, the company has committed to a hedging strategy that ensures minimum cash requirements (interest, dividends and maintenance capital) will be sufficiently covered even in very low commodity price environments. While the fee-based business provides some degree of stability, the company has sufficient flexibility to capture upside commodity opportunities. Exposure to natural gas prices is limited due to the company's balanced mix of fee-based, keep-whole and percent of proceeds contracts. Longer-term, however, management intends to trend to a long position in natural gas through greater reliance on percent of proceeds contracts. The long-term strategy is consistent with management's belief that demand for natural gas will increase. DEFS's assets are favorably located in states that account for roughly 90% of the natural gas produced in the Unites States. The asset base is also well balanced, with operations in seven major natural gas producing regions, including the high growth Onshore Gulf Coast, Rocky Mountains Rocky Mountains, major mountain system of W North America and easternmost belt of the North American cordillera, extending more than 3,000 mi (4,800 km) from central N.Mex. to NW Alaska; Mt. Elbert (14,431 ft/4,399 m) in Colorado is the highest peak. , Offshore Gulf Coast and Canadian basins and the more stable producing basins in the mid-continent, East Texas and Permian Basin The Permian Basin is a sedimentary basin largely contained in the western part of the U.S. state of Texas. It reaches from just south of Lubbock, Texas, to just south of Midland & Odessa, extending westward into the southeastern part of the adjacent state of New Mexico. . Over time, operations are expected to become more heavily weighted toward the high growth production areas in Western Canada
Western Canada, commonly referred to as the West , Onshore/Offshore Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east and Rocky Mountains. Processing cash flows are also well-diversified and spread over DEFS's 70 owned and operated processing plants and 13 other plants in which it holds equity interest. DEFS intends to grow its already strong asset base through greenfield build-outs and bolt-on acquisitions. Due to a low projected dividend payout policy and relatively modest maintenance capital expenditures, DEFS is projected to have substantial free cash flow. However, the cash flow will likely be invested back into DEFS's operations on an opportunistic basis. |
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