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DUFF & PHELPS LOWERS RATINGS ON MAXUS ENERGY DEBT

 CHICAGO, Oct. 7 /PRNewswire/ -- Duff & Phelps Credit Rating Company has lowered the ratings on the senior debt of Maxus Energy to `BB' (Double-B) from `BB+' (Double-B-Plus). The new rating is also extended to the senior debt securities that may be issued from Maxus' $500 million shelf registration of debt, preferred and common equity securities.
 While Maxus has substantially improved its balance sheet further meaningful improvement is not expected unless assets or equity is sold. While the company had pursued the sale of its Northwest Java assets, its price expectations were not met and the company did not accept any of the bids. The proceeds of the sale would have likely been applied to future capital spending projects and be used to reduce debt. In the absence of the sale, Maxus intends to reinstate its dividend reinvestment program which help to forestall deterioration in its balance sheet strength.
 Maxus relies heavily on exploration for revenue and earnings growth. Its ability to meet future interest payments, to redeem preferred shares as required and to maintain access to capital markets depends to a large extent on continued exploration success. Maxus, therefore, has a relatively aggressive capital spending plan over the next several years despite high debt service requirements and upcoming preferred stock redemption requirements. Until full production from properties under development come on stream cash flow coverage of interest likely will remain under pressure. In 1992, EBIT-to-interest was 1.8 times.
 -0- 10/7/93
 /CONTACT: Dave W. Eisinger of Duff & Phelps Rating Company, 312-368-3145/
 (MXS)


CO: Maxus Energy ST: IN: OIL SU: RTG

CK -- NY057 -- 1283 10/07/93 13:53 EDT
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Publication:PR Newswire
Date:Oct 7, 1993
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