Moody’s views Earthstone positively

Moody's Investors Service said it changed Earthstone Energy Holdings, LLC's outlook to positive from stable. Concurrently, Moody's affirmed Earthstone's B1 corporate family rating, B1-PD probability of default rating and B3 senior unsecured notes rating. The speculative grade liquidity rating is unchanged at SGL-2.

On Monday, Earthstone and Permian Resources Corp. announced that Permian Resources agreed to buy Earthstone for about $4.5 billion, including debt, in an all-stock deal. Moody’s rates Permian Resources B1. The transaction is expected to close by the end of 2023, subject to regulatory and shareholder approvals.

Earthstone's positive rating outlook is consistent with Permian's positive outlook, “and reflects the credit enhancing nature of the potential transaction, which should enhance the combined company's position in the Permian Basin, creating synergy opportunities and increased economies of scale,” the agency said in a press release.

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