Haynes and Boone polled banks, producers, private equity firms, professional services and oilservice companies in January to take an early pulse of the spring redetermination expectations from the industry and the financial institutions supplying the credit.

WTI - 10 Year Chart - Nasdaq

Chart – Nasdaq

Key findings by Haynes and Boone:

  • Overall respondents expect 79% of the borrowers to see a decrease in their borrowing base in spring 2016
  • Overall respondents, on average, expect to see borrowing bases to decrease by 38% compared to what they were in fall 2015
  • As to the most likely path to be taken by lenders and borrowers who face a borrowing base deficiency this spring: 36% of respondents said the would negotiate an amendment or extension with the lender; 31% said they would sell non-core assets; 15% said they would seek capital from a hedge fund or private equity fund; 4% said sell the company; 13% said restructure or declare bankruptcy
  • 53% of respondents compared today’s E&P down cycle to the down cycle of the mid-1980s, 17% compared it to the late 1990s, and 25% said there was no historical comparison

Full survey results may be seen at the Haynes and Boone website.


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