Oil Drillers Facing Credit Line Resets
Bloomberg Bloomberg reported that oil and gas companies are expecting their lenders will recalculate the value of properties they staked as loan collateral in the next few months.
Bloomberg notes the credit lines operate like credit cards and are reset each spring and fall based on the borrowers’ petroleum reserve.
Bloomberg said, according to a Bloomberg Intelligence analyst, more than 20 U.S. exploration and production companies have used at least 60% of their credit lines. If credit lines are cut, the most indebted producers will be left scrambling to raise money elsewhere, Bloomberg notes.
To read the entire Bloomberg article, click here.