S&P lifts Permian Resources

S&P said it upgraded Permian Resources Corp. (formerly known as Centennial Resource Development Inc. following its merger with Colgate Energy Partners III LLC) to B+ from B and removed it from CreditWatch where it was placed with positive implications on May 20. The agency also raised the issue-level ratings on the unsecured debt to BB- from B+. The 2 recovery rating on the unsecured notes is unchanged, indicating substantial (70%-90%; rounded estimated: 85%) recovery in default.

“Permian benefits from its improved scale following the close of the merger. The combined entity is the largest pure-play exploration and production (E&P) company in the Delaware basin, holding a 180,000-net-acreage position. Following the merger, the combined entity's proved developed reserves are in line with its B+ rated peers at nearly 555 million barrels of oil equivalent (MMBoe) on a pro forma year-end 2021 basis,” S&P said in a press release.

Over the next two years, the agency said it estimates Permian’s average funds from operations to debt will be greater than 60% and debt to EBITDA will range from 0.5x-1.5x.

The outlook is stable.

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