Fitch rates Resolute Energy B-, notes B+

Fitch Ratings said it assigned Resolute Energy Corp. a B- long-term issuer default rating and B+/RR2 ratings to its senior unsecured notes.

Roughly $525 million of long-term debt is affected by this action.

Fitch said the ratings are based on Resolute's small but evolving asset base, additional liquidity provided by the expected divestment of Aneth Field, and an improving operating cost structure.

The agency estimates cash costs will decline by 29% from $18.24/boe in 2017 to $12.9/boe in 2018 and approach the cost profile of Permian based E&P operators. The forecast incorporates 2017 production volumes of 23.8 mboe/day, at the low end of management guidance of 24 to 28 mboe/day.

Close to 100% of Resolute's 2017 capital expenditure will be spent on the Delaware Basin where the company reported encouraging well results, driven by enhanced completion designs including tighter spacing and higher proppant loading per foot, Fitch explained.

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