The Spring 2024 Haynes and Boone borrowing base and price deck surveys revealed lenders are increasingly bullish on oil prices contrasted by a severe near-term slump in natural gas markets, and market players expect asset divestments driven by a recent wave of energy M&A activity to likely increase in 2025.
The Borrowing Base Redeterminations Survey, conducted with 92 energy lenders and borrowers, suggests a strong market for oil producers. Around 35% of respondents expect no change in borrowing bases in spring 2024 compared to fall 2023, but roughly 20% expect a 10% increase and 7% expect a 20% increase.
This modest optimism aligns with the Energy Bank Price Deck Survey, which includes responses from 26 energy banks and showed stable to slightly higher long-term oil price projections. Participants’ base case is now at $57.09 per barrel (WTI) by 2033 compared to $55.59 in the fall 2023 survey. The bump may be attributable to the recent confidence in the upstream business exemplified by the historical spree of consolidations among E&P companies over the last year.
