Fitch upgrades Permian Resources

Fitch Ratings said it upgraded the long-term issuer default ratings of Permian Resources Corp. and Permian Resources Operating LLC, collectively PR, to BB from BB- and the senior unsecured ratings to BB/RR4 from BB-/RR4. The outlook is positive.

The agency also raised the IDRs for Earthstone Energy, Inc. and Earthstone Energy Holdings, LLC to BB from B+.

This action equalizes the ratings for Earthstone and Permian Resources after the close of PR's acquisition of Earthstone, Fitch said.

The agency also boosted Earthstone Energy Holdings' two outstanding unsecured notes due 2027 and 2031 to BB/RR4 from B+/RR4 and have been assumed by PR at close. Additionally, Fitch raised Permian Resources Operating's reserve-based lending credit facility to BBB-/RR1 from BB+/RR1.

“The upgrades and positive outlook reflect the credit-accretive Earthstone acquisition, which materially increases PR's production size, proved reserves and total acres and supports strong post-dividend FCF. PR's credit profile is also supported by Fitch's expectation for material synergy realization by YE 2024, strong post-close liquidity profile, sub 1.5x EBITDA leverage and adequate oil hedge coverage,” Fitch said in a press release.

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