Fitch upgrades WPX Energy

Fitch Ratings said it upgraded WPX Energy, Inc.'s long-term issuer default rating to BBB- from BB/rating watch positive. The senior unsecured debt ratings were also upgraded to BBB- from BB/rating watch positive. The senior secured revolver was affirmed. Fitch removed the rating watch and the outlook is stable.

The upgrade considers WPX's announcement it closed its previously announced deal with Felix Energy in a leverage neutral deal valued at about $2.5 billion, funded with $900 million of senior unsecured notes and roughly 153 million shares to the seller.

The acquisition is immediately accretive to WPX's credit profile, adding size, scale and inventory to the company's highly economic Permian acreage, and improving the positive free cash flow outlook. Fitch said it believes WPX will realize scale-linked efficiencies as the Felix assets are integrated into WPX's drilling program, which should improve unit-economics and provide the longer-term FCF upside.

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