High Grade Energy Weekly: Week ending May 22, 2026

Research evidence excerpt

High Grade Energy Weekly: Week ending May 22, 2026

Ratings Agency Actions

Moody’s revises FANG’s outlook to positive from stable,

affirms Baa2 rating

On Monday, Moody’s revised Diamondback Energy’s (FANG) outlook to positive from

stable and affirmed its Baa2 rating. The positive outlook reflects Moody’s expectations

that credit metrics will continue to improve as a portion of significant FCF generation is

used to reduce debt balances. Moody’s could upgrade FANG if it achieves its debt

reduction goals and maintains strong capital efficiency, RCF/debt is sustained above

70%, and leveraged full-cycle ratio (LFCR) is above 2.5x at midcycle prices. Moody’s

could downgrade FANG if there is recurring negative FCF or if it undertook significant

debt funded shareholder returns or acquisitions, RCF/debt drops below 40%, and/or

LFCR declines below 1.5x.

Moody’s revises VNOM’s outlook to positive from stable,

affirms Ba1 rating

On 5/15, Moody’s revised Viper Energy’s (VNOM) outlook to positive from stable and

affirmed its Ba1 rating. The positive outlook reflects VNOM’s enhanced scale driven by

acquisitions, and the company’s stronger balance sheet following debt repayment. The

outlook is also aligned with the positive outlook at VNOM’s controlling owner, FANG.

Moody’s could upgrade VNOM if FANG’s ratings were upgraded and VNOM remains core

to FANG’s operations. An upgrade could also be supported if VNOM continued to

increase its production scale while maintaining prudent financial policies, including

debt/EBITDA around 1.0x and debt to proved developed (PD) reserves approaching

$5/boe. Moody’s could downgrade the rating if VNOM executes a large debt funded

acquisition or experiences a sharp and sustained decline in production. The ratings could