Energy producers gain breathing room to borrow amid price uptick: survey

7 Oct 2017   Shale Oil

U.S. oil and gas producers have gained more flexibility to borrow money as crude prices have modestly rebounded, according to a survey of the companies, lenders and others released on Friday. Greater room to borrow means energy producers are under less immediate pressure to cut costs or output. Only 26 percent of energy producers with loans are likely to see a decrease this fall in their borrowing bases, according to the survey by Dallas-based law firm Haynes and Boone. Borrowing base redeterminations are a measure that lenders use to determine available credit according to property value. A year ago, the same survey showed 41 percent were expected to see a decline. The calculations factor in banks’ price projections for producers’ oil and gas reserves. Abundant crude oil inventories, which have driven prices down by half since 2014, are starting to dwindle. NYMEX futures have gained about […]

Comments are closed.