S&P raises Chord Energy

S&P said it raised its ratings for Chord Energy Corp. to B+ from B and its unsecured issue-level rating to BB- from B+. Chord is the result of the merger between Oasis Petroleum Inc. and Whiting Petroleum Corp. The 2 recovery rating on the unsecured notes remains unchanged, indicating substantial (70%-90%; rounded estimate: capped at 85%) recovery in default.

“We expect average FFO to debt well above 100% with debt to EBITDA well below 1x through 2024, with cash flows increasing substantially and no new debt being added to the balance sheet as part of the merger. Whiting did not have any funded debt outstanding prior to the transaction, and Oasis only had $400 million of unsecured notes due in 2026. Its liquidity will also improve on the back of the merger, with the revolving credit facility extended to 2027 and its commitments increasing to $800 million ($2 billion facility borrowing base) with nothing drawn,” S&P said in a press release.

The outlook is positive.

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