{"id":19346,"date":"2016-03-31T14:10:12","date_gmt":"2016-03-31T19:10:12","guid":{"rendered":"http:\/\/olduvai.ca\/?p=19346"},"modified":"2016-03-31T14:10:12","modified_gmt":"2016-03-31T19:10:12","slug":"impatient-banks-a-real-red-flag-for-the-oil-patch","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=19346","title":{"rendered":"Impatient Banks: A Real Red Flag For The Oil Patch"},"content":{"rendered":"<h3><a href=\"http:\/\/oilprice.com\/Energy\/Energy-General\/Impatient-Banks-A-Real-Red-Flag-For-The-Oil-Patch.html\" target=\"_blank\">Impatient Banks: A Real Red Flag For The Oil Patch<\/a><\/h3>\n<div class=\"column75-25 clear\">\n<div class=\"column75-25_1\">\n<div id=\"article-content\" class=\"wysiwyg clear\">\n<p>Lenders to the oil and gas industry have been extraordinarily lenient amid the worst downturn in decades, allowing indebted companies to survive a little while longer in hopes of a rebound in oil prices. But the screws are set to tighten just a bit more as the periodic credit redetermination period finishes up.<\/p>\n<p>Banks reassess their credit lines to oil and gas firms twice a year, once in the spring and once in the fall. While the lending arrangements vary from bank to bank and from borrower to borrower, lenders largely\u00a0<a href=\"http:\/\/oilprice.com\/Energy\/Oil-Prices\/Day-Of-Reckoning-For-US-Shale-Will-Have-To-Wait.html\">punted<\/a>\u00a0on both redetermination periods last year, providing a grace period for drillers to wait out the bust in prices. But oil prices have not rebounded much since the original crash in late 2014.<\/p>\n<p>Time could run out for companies that have been hanging on by a thread.<\/p>\n<p>Debt was not seen as a big problem in the past, as triple-digit oil prices had both lenders and borrowers eager to see drilling accelerate and spread to new frontiers. Indeed, debt rose even when oil prices exceeded $100 per barrel. According to The Wall Street Journal, the\u00a0<a href=\"http:\/\/www.wsj.com\/articles\/oil-explorers-face-challenge-to-secure-financing-as-oil-prices-fall-1459254942\">net debt<\/a>\u00a0of publically-listed global oil and gas companies grew threefold over the past decade, hitting a high of $549 billion last year. In fact, debt accumulated in the sector at a faster rate between 2012 and 2015 \u2013 a period when oil prices were exceptionally high \u2013 than in previous years.<\/p>\n<p>With oil prices down more than 60 percent from the 2014 peak, piling on ever more debt to a loss-making operation looks increasingly untenable. Distressed energy loans \u2013 loans in danger of default \u2013 account for\u00a0<a href=\"http:\/\/www.wsj.com\/articles\/coming-to-the-oil-patch-bad-loans-to-outnumber-the-good-1458840050\">more than half<\/a>\u00a0of the energy portfolio at several major banks.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Impatient Banks: A Real Red Flag For The Oil Patch Lenders to the oil and gas industry have been extraordinarily lenient amid the worst downturn in decades, allowing indebted companies to survive a little while longer in hopes of a rebound in oil prices. But the screws are set to tighten just a bit more [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3],"tags":[1361,63,195,6010,1729,3356,5332],"class_list":["post-19346","post","type-post","status-publish","format-standard","hentry","category-energy-2","tag-bankruptcy","tag-banks","tag-debt","tag-nick-cunningham","tag-oil-and-gas-industry","tag-oil-patch","tag-oilprice-com"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/19346","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=19346"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/19346\/revisions"}],"predecessor-version":[{"id":19347,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/19346\/revisions\/19347"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=19346"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=19346"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=19346"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}