Moody's rates Tap Rock notes B3

Moody's Investors Service said it assigned first time ratings to Tap Rock Resources, LLC, including a B2 corporate family rating, B2-PD probability of default rating and a B3 rating to the company's proposed $450 million senior notes due 2026.

The outlook is stable.

“Tap Rock's ratings reflect its low financial leverage and prolific acreage in the Permian's Delaware Basin offset by its smaller, albeit growing size and scale, limited track record, modest capital outspend and exposure to federal lands,” commented Sreedhar Kona, Moody's senior analyst, in a news release.

“Despite using a portion of the offering to fund a distribution, the stable outlook reflects our expectation that Tap Rock will execute its development program while still delivering strong financial leverage metrics.”

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