Moody's upgrades Montage Resources

Moody's Investors Service said it upgraded Montage Resources Corp.'s corporate family rating to B2 from B3, probability of default rating to B2-PD from B3-PD and senior unsecured notes to B3 (LGD 5) from Caa1 (LGD 4).

Montage was formerly known as Eclipse Resources Corp.

Montage's speculative grade liquidity rating is unchanged at SGL-3.

The outlook is stable.

The upgrades conclude a review for upgrade that began in August 2018 after the company announced a merger with Blue Ridge Mountain Resources, Inc., Moody's said.

The upgrades reflect the deleveraging and accretive nature of the merger between Eclipse Resources and Blue Ridge Mountain, creating Montage Resources, the agency said.

Montage will benefit from improved scale and credit metrics going forward, Moody's said.

The ratings reflect Montage's merger with Blue Ridge, an all-stock transaction that has created a larger pro-forma combined Appalachian basin-focused exploration and production company with a larger production and cash flow base, the agency said.

The ratings also consider the new deeper drilling inventory that will extend portfolio durability, Moody's said.

The ratings also take into account the company's relatively short reserve life, moderate scale, concentrated operations in the Marcellus and Utica Shale plays and a natural gas weighted production profile, the agency said.

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