Fitch rates Extraction Oil IDR B+

Fitch Ratings said it assigned a long-term issuer default rating of B+ to Extraction Oil & Gas, Inc.

The outlook is stable.

Fitch said the rating reflects the company's sizeable oil-focused DJ Basin acreage position, competitive cost structure leading to solid netbacks, favorable hedging policy, and credit conscious financial policy.

These considerations are offset by the company's small production size, heightened execution risk given the plan to grow from about 30 mboe/d to over 80 mboe/d in two years using pad drilling, and the need for external capital to fund the growth plan.

Despite the competitive economics of Extraction Oil’s oil and gas assets, small size and execution risk will likely serve as near-term caps to the rating, the agency explained.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.