U.S. oil and gas producers are selling shares at record speed, a sharp turnaround from past years when debt markets were the industry’s favored source of cash, Bloomberg News reported yesterday. There are two main reasons behind the shift: First, the downturn made it tougher and more expensive to borrow. Second, using equity can help strengthen a company’s balance sheet at a time when the oil bust is dragging into its third year. The latest is Laredo Petroleum Inc. which said yesterday that it’s selling 13 million shares to repay debt and finance a recent acquisition. U.S. energy producers have raised $16 billion from share sales since the start of the year, more than half of the total $29 billion raised by the industry, according to data compiled by Bloomberg. By comparison, equity accounted for 25 percent or less of the capital raised for the past five years. Read more.
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