S&P puts WPX on positive watch

S&P said it placed all its ratings on WPX Energy Inc., including the BB- issuer credit and issue-level ratings, on CreditWatch with positive implications on news the company plans to acquire Felix Energy for $2.5 billion.

The agency expects WPX to fund the deal with a combination of $1.6 billion in equity and $900 million of debt.

“The CreditWatch positive placement reflects the elevated likelihood that we will upgrade WPX following the close of its acquisition of Felix Energy, based on the combined company’s larger size and scale. The transaction will increase WPX’s proved reserves materially, and its current production by over 30% to about 226,000 barrels of oil equivalent per day (boe/d). In addition, the acquired properties produce about 70% crude oil, which should improve WPX’s oil weighting and profitability,” said S&P in a press release.

S&P said it sees resolving the CreditWatch around the close of the deal, which it expects to happen by April.

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