Morningstar DBRS Finalizes Methodologies for Oil & Gas PDP Reserves Asset-Backed Securities

Morningstar DBRS finalized the following new and/or updated methodologies (together, the updated methodologies) to be used to determine credit ratings in the Oil & Gas PDP Reserves asset class. These methodologies present the criteria for which oil & gas PDP reserves asset-backed securities (ABS) ratings are assigned and/or monitored:

-- "Rating Oil & Gas PDP Reserves Asset-Backed Securities;"
-- "Operational Risk Assessment for U.S. ABS Originators and Servicers"- Sample Operational Risk Questions for U.S. Oil & Gas PDP Reserves Originator/Operator Exhibit and Sample Operational Risk Questions for U.S. Oil & Gas PDP Reserves Manager Exhibit. This methodology combined the former two methodologies ("Operational Risk Assessment for U.S. ABS Originators" and "Operational Risk Assessment for U.S. ABS Servicers") into one standalone methodology. No other changes were made as a result of combining the two methodologies.;
-- "Operational Risk Assessments for Canadian Structured Finance"-Canadian Oil & Gas PDP Reserves Originators/Servicers Exhibit;
-- "Operational Risk Assessment for European Structured Finance Originators"-Sample Operational Risk Agenda for European ABS Originators-Additional Agenda Items Exhibit;
-- "Operational Risk Assessment for European Structured Finance Servicers"-Sample Operational Risk Agenda for European ABS Servicers-Additional Agenda Items Exhibit;
-- "Morningstar DBRS Master U.S. ABS Surveillance"-U.S. Oil & Gas PDP Reserves ABS Appendix;
-- "Master Canadian Structured Finance Surveillance Methodology"-Canadian Oil & Gas PDP Reserves Surveillance Section; and
-- "Master European Structured Finance Surveillance Methodology"-European Oil & Gas PDP Reserves Surveillance Section.

The updated methodologies supersede the following prior versions and are all effective as of August 6, 2024:
-- "Operational Risk Assessment for U.S. ABS Originators" (June 28, 2024)
-- "Operational Risk Assessment for U.S. ABS Servicers" (June 28, 2024)
-- "Operational Risk Assessments for Canadian Structured Finance" (April 5, 2024)
-- "Operational Risk Assessment for European Structured Finance Originators" (March 7, 2024)
-- "Operational Risk Assessment for European Structured Finance Servicers" (September 15, 2023)
-- "Morningstar DBRS Master U.S. ABS Surveillance" (May 8, 2024)
-- "Canadian Structured Finance Surveillance Methodology" (June 7, 2023)
-- "Master European Structured Finance Surveillance Methodology" (March 7, 2024)

For the "Rating Oil & Gas PDP Reserves Asset-Backed Securities" methodology, Morningstar DBRS applied a nonmaterial, editorial change to the description of variable costs on page 8.

Morningstar DBRS also conducted its periodic review of the "Master Canadian Structured Finance Surveillance Methodology." Morningstar DBRS deems the update not to be material and determined that no credit ratings are expected to change as a result of the update.

Per the press release dated May 8, 2024, Morningstar DBRS requested comments on these Oil & Gas PDP Reserves Asset-Backed Securities-related methodologies. The request for comment (RFC) period ended on June 7, 2024, and no comments were received. All comments received during the RFC period are published to the Morningstar DBRS website, except in cases where confidentiality is requested by the respondent.

Morningstar DBRS also made editorial and nonmaterial changes to update all references to the now-retired "Operational Risk Assessment for U.S. ABS Servicers" and "Operational Risk Assessment for U.S. ABS Originators" methodologies to the now-consolidated, standalone "Operational Risk Assessment for U.S. ABS Originators and Servicers" methodology for all Oil & Gas PDP Reserves Asset-Backed Securities-related methodologies as well as for the following additional methodologies listed below:

-- "Rating Film Rights Securitizations"
-- "Rating Marine Container Securitizations"
-- "Rating Solar ABS Transactions"
-- "Rating Structured Aircraft Transactions"
-- "Rating U.S. Auto Fleet Lease Securitizations"
-- "Rating U.S. Auto Lease Securitizations"
-- "Rating U.S. Equipment Lease and Loan Securitizations"
-- "Rating U.S. Federal Family Education Loan Program Securitizations"
-- "Rating U.S. Private Student Loan Securitizations"
-- "Rating U.S. Property Assessed Clean Energy (PACE) Securitizations"
-- "Rating U.S. Rental Car Securitizations"
-- "Rating U.S. Retail Auto Loan Securitizations"
-- "Rating U.S. Structured Finance Transactions"
-- "Rating U.S. Structured Settlements Asset-Backed Securitizations"
-- "Rating U.S. Timeshare Loan Securitizations"
-- "Rating U.S. Wholesale Securitizations"
-- "Rating U.S. Credit Card Asset-Backed Securities"

Notes:
Morningstar DBRS methodologies are publicly available on its website dbrs.morningstar.com under Methodologies & Criteria.

For more information on this methodology, or on this industry, visit dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.