S&P raises Chord Energy

S&P said it raised its ratings for Chord Energy Corp. and its unsecured debt to BB- from B+. The debt recovery rating remains 3 indicating meaningful (50%-70%; rounded estimate: capped at 65%) recovery in default.

“We anticipate FFO to debt will average well above 100% over the next two years with debt to EBITDA well below 1x. While we expect 75% or more of near-term free cash flows to be distributed through a combination of base and variable dividends as well as share repurchases, we note future distribution levels could change depending on the company's leverage,” S&P said in a press release.

“Chord Energy also ended 2022 with more than 650 MMBoe of proved reserves (around 77% developed, 58% oil), which is in line with BB- rated peers. However, its cash costs are at the higher end of the peer group and its highly concentrated footprint makes the company susceptible to unforeseen regional risks,” the agency said.

The outlook is stable.

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