Moody's assigns Oasis Petroleum B1, notes B3

Moody's Investors Service said it assigned new ratings to Oasis Petroleum Inc., including a B1 corporate family rating, a B1-PD probability of default rating, a B3 rating to its planned $400 million of senior unsecured notes due 2026 and a SGL-2 speculative grade liquidity rating. The outlook is stable.

The notes are rated B3, two notches below the B1 CFR, reflecting the relatively large potential priority claim of Oasis' secured revolving credit facility over the notes, the agency said.

Oasis agreed to acquire certain Williston Basin assets from a wholly owned subsidiary of Diamondback Energy, Inc. for about $745 million. Oasis also agreed to sell its Permian Basin assets for $406 million and certain contingent earn-out payments over time.

The note and sale proceeds will be used to fund the Williston Basin asset acquisition. If the acquisition agreement is terminated or the acquisition is not consummated, then the new notes will be redeemed at 100% of the issue price of the notes.

"The proposed notes will help fund the acquisition and enhance Oasis' scale in the Williston Basin, while achieving good liquidity and sound leverage metrics," said Amol Joshi, a Moody's vice president and senior credit officer, in a press release.

The stable outlook reflects the expectation Oasis will likely spend within cash flow while maintaining sound leverage metrics.

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