With crude trading near its lowest level since 2003, banks large and small are clamping down further on how much they’re willing to lend to risky oil-and-gas companies, Bloomberg News reported yesterday. Standard & Poor’s estimates that credit lines to these companies — the amount banks are willing to lend based on the value of the firms’ reserves — could be cut by 30 percent the next time banks conduct their twice-yearly reevaluations in April. That’s even after a reduction of about 10 percent in November, according to Thomas Watters, managing director of the credit rater’s oil and gas group. Banks including Wells Fargo & Co., Goldman Sachs Group Inc., Bank of America Corp. and JPMorgan Chase & Co. and regional banks such as Comerica Inc. and SunTrust Banks Inc. have all voiced caution about the sector as increasing numbers of energy companies file for bankruptcy. Read more.
Listen to a podcast featuring Deborah D. Williamson, a co-author of ABI's When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy, discussing current distress in the oil and gas industry, and providing an outlook for 2016.
To purchase a copy of When Gushers Go Dry from the ABI Bookstore, please click here.
Be sure to attend ABI’s Annual Spring Meeting in Washington, D.C., from April 14-17, as a panel of experts will further addressing bankruptcies in the oil industry. Register here.
