Fitch gives HighPeak B-, loans BB-, B

Fitch Ratings said it gave a first-time long-term issuer default rating of B- to HighPeak Energy, Inc. Fitch also assigned BB-/RR1 ratings to HighPeak's senior secured reserve-based lending credit facility and B/RR3 ratings to the new $225 million of unsecured notes.

“HighPeak's rating reflects their Permian asset base with high liquids exposure, solid drilling inventory of economic locations, expected rapid increase in size and scale, and the leverage profile forecast to remain at or below 1x through the cycle. These factors are partially offset by the company's current small production size and reserve replacement, and the company's currently low 12-month hedge coverage of approximately 25% of 2022 forecast oil production, which leaves future cash flows susceptible to market price fluctuations,” Fitch said in a press release.

The agency said it expects HighPeak to use the notes to repay the balance on its credit facility and employ the remainder for capital expenditures.

The outlook is stable.

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