Borrowing Report Forecasts Oil Lending Bloodbath

By Keith Goldberg (April 1, 2020, 5:30 PM EDT) -- Drillers are facing major cuts in their ability to borrow money from banks amid a historic crash in oil prices, according to a Haynes and Boone LLP report released Wednesday, a development that could drive many producers into bankruptcy.

Lenders this spring are poised to redetermine the borrowing bases for reserve-based loans taken out by oil and gas producers. Those loans, a staple of energy industry lending, are based on a company's total reserves and the price of oil and are usually revised twice a year.

In the law firm's survey of oil and gas industry players that include producers, banks and...

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