Moody’s rates Extraction Oil CFR B3, notes Caa1

Moody's Investors Service said it assigned a B3 corporate family rating to Extraction Oil & Gas Holdings, LLC and a Caa1 rating to its proposed $500 million senior unsecured notes.

The outlook is stable.

Net proceeds from the new notes will be used to refinance a $430 million term loan and reduce outstanding borrowings on its revolving credit facility.

"Over the past two years Extraction has successfully transitioned from being a new company acquiring acreage to growing its production to approximately 26,000 boe per day," Moody's vice president, senior analyst James Wilkins said in a news release.

"Extraction's growth plans will require significant capital and result in negative free cash flow over the next three years."

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