Shale drillers see more interest from banks as oil prices rally
(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 energy prices rally.
So-called borrowing bases will increase as much as 20% during the imminent round of talks between drillers and lenders, according to most respondents in a survey conducted by law firm Haynes & Boone LLP.
The findings indicate a continued improvement after the dire conditions experienced in the oil and gas sector last year, when the pandemic and global gluts led to a slump in energy prices and prompted banks to cut back on lending.
The previous Haynes & Boone survey, published in April, indicated borrowing bases would remain flat or rise by 10%. Lending against crude and gas reserves, a key source of capital for explorers, typically sees twice-year retederminations, in which bankers reassess their commitments.
