Lack of Credit Is Latest Blow to the Struggling Shale Industry
- Semi-annual reviews drop at least six credit lines 10% or more
- Shrinking borrowing bases have led to bankruptcies in the past
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Banks have begun trimming back the credit lines of America’s shale producers, further undercutting a beleaguered industry that’s been struggling to rebuild investor confidence.
Laredo Petroleum Inc. and Oasis Petroleum Inc. are among at least six producers whose ability to secure short-term loans against their oil and natural gas reserves have dropped by 10% or more, according to data in earnings statements and filings. The declines offer the first hint of results from a semi-annual bank review of the industry’s borrowing capacity that generally runs through December.