S&P boosts Aris Water

S&P said it raised its ratings on Aris Water Solutions Inc. and its $400 million of senior unsecured notes to B+ from B. The 4 recovery rating on the notes is unchanged, indicating average (30%-50%; rounded estimate: 45%) recovery in default.

“Volumes have increased to 947,000 barrels of water per day (kbwpd) in 2021 from 685 kbwpd in 2020. We expect throughput to further increase to 1,280 kbwpd in 2022. As a result, we expect EBITDA to increase to approximately $150 million in fiscal 2022, a 30% increase from the prior year and 164% increase since 2020. Growth of Aris' integrated water system will continue to be a competitive advantage in its acreage area as a ramp-up of recycled barrels supports stronger margins relative to produced water operations,” the agency said in a press release.

S&P said it forecasts Aris’ adjusted debt to EBITDA to be about 3.5x in fiscal 2022 and below 4x in 2023. The outlook is stable.

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