S&P boosts Earthstone Energy

S&P said it raised its ratings for Earthstone Energy Inc. to B+ from B and its unsecured notes to BB- from B+. The recovery rating on the notes remains 2.

Earthstone closed its acquisition of Novo Oil & Gas Holdings LLC and concurrently it sold a working interest of a third of Novo to Northern Oil and Gas Inc. for $1 billion.

“Pro forma for the acquisition, Earthstone's production and reserves will be more in line with peers in the 'B+' category as it now holds about 223,000 net acres in the Permian Basin. Earthstone expects production to exceed 110,000 barrels of oil equivalent per day (boe/d) in 2023, increasing to over 130,000 boe/d in the fourth quarter of 2023 (approximately 41% oil and 69% liquids). Pro forma proved reserves are about 460 million (mm) boe, of which 76% are classified as proved developed producing,” the agency said in a press release.

The outlook is stable.

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