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S&P downgrades rating on Goodrich Petroleum

The Associated Press

Standard & Poor's Ratings Services lowered its ratings on Goodrich Petroleum Corp. Tuesday due to lower oil production and liquidity concerns.

The rating agency dropped the corporate credit rating on the Houston-based oil and gas producer one notch to 'B-' from 'B', sinking it further in junk-grade status. The outlook is stable.

S&P also lowered its issue-level rating on the company's senior unsecured debt another notch in junk-grade territory to "CCC" from "CCC+".

The rating agency said it made the move based on a reduction in the company's borrowing and the company's third-quarter oil production coming in slightly below expectations. The production shortfall was a result of asset sales and delayed completions in the Tuscaloosa Marine Shale oil play.

S&P said the company's liquidity is less than adequate and will decline further over the next two years. Given this and its anticipated cash flow, it will not have enough to cover the company's capital expenditures and the potential repurchase of its convertible notes.

Goodrich's shares fell 11 cents to close at $8.94.