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Oil Drillers Face Shrinking Credit Lines as Banks Revalue Assets

  • Almost 80 percent will see borrowing base cut, survey shows
  • Borrowers to see credit lines cut by average of 39 percent
Updated on

Oil producers in the U.S. are about to see their credit lines shrink, just when they need the money most.

The latest round of twice-yearly reevaluations is under way, and almost 80 percent of oil and natural gas producers will see a reduction in the maximum amount they can borrow, according to a survey by Haynes and Boone LLP, a law firm with offices in Houston, New York and other cities. Companies’ credit lines will be cut by an average of 39 percent, the survey showed.