Shale drillers see more interest from banks as oil prices recover
Through Simon casey to 19/10/2021
(Bloomberg) – Banks are gradually offering more credit to U.S. shale oil and natural gas producers as the industry recovers from last year’s contraction and rebound in energy prices.
So-called borrowing bases will rise by as much as 20% in the looming round of talks between drillers and lenders, according to most of those interviewed in a survey by law firm Haynes & Boone LLP.
The results point to continued improvement after dire conditions in the oil and gas sector last year, when the pandemic and global gluts caused energy prices to plummet and prompted banks to cut lending.
The previous Haynes & Boone survey, published in April, indicated that borrowing bases would remain stable or increase by 10%. Loans against crude and gas reserves, a key source of capital for explorers, are typically subject to semi-annual reviews, during which bankers reassess their liabilities.
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