S&P Global Ratings has assessed SOCAR’s planned deal to acquire stakes in several assets of US-based Comstock Resources as positive for the company’s credit profile, APA-Economics reports, citing a statement by S&P Global Ratings.
The agency noted that the proposed $1.65 billion transaction would help offset Comstock Resources’ free cash flow deficit and improve its credit metrics in the near term.
According to S&P’s expectations, the company may use part of the net proceeds from the transaction to reduce borrowings under its credit facility and to repurchase some or all of its bonds due in 2029.
At the same time, the agency left Comstock Resources’ “B” issuer credit rating and “stable” outlook unchanged. It noted that the transaction has not yet been definitively signed and that the company’s credit metrics remain significantly dependent on natural gas prices.
As part of the transaction, SOCAR plans to acquire a 20% non-operated interest in Comstock Resources’ Legacy Haynesville assets, a 15% non-operated interest in its Western Haynesville assets, as well as 15% of the company’s 73% stake in Pinnacle Gas Services. The total value of the transaction is $1.65 billion.
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