Fitch positive on Earthstone, Permian

Fitch Ratings said it placed its ratings on Permian Resources Corp., Permian Resources Operating, LLC, Earthstone Energy, Inc. and Earthstone Energy Holdings LLC on rating watch positive.

On Monday, Earthstone, rated B-, and Permian Resources, rated BB-, announced that Permian Resources agreed to buy Earthstone for about $4.5 billion, including debt, in an all-stock deal. The transaction is expected to close by the end of 2023, subject to regulatory and shareholder approvals.

“The combined company will be one of the largest producers in the Permian with 400,000 total net acres split between the Delaware and Midland basins and total production of approximately 300 Mboepd (46% oil). The transaction is also expected to materially enhance FCF generation, overall returns and generate approximately $175 million of identified synergies,” Fitch said in a press release.

Fitch said it aims to resolve the RWP once the deal closes.

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