Lenders could begin expanding credit lines for U.S. oil explorers this spring, a new survey says.
A study by Dallas law firm Haynes & Boone released on Tuesday showed energy and financial professionals believe 76 percent of U.S. oil producers will soon get a lift in the amount of debt they can borrow from certain corporate loans.
It’s a big pivot after banks cut oil-company borrowing bases last year amid falling oil prices. Borrowing bases are amounts oil companies can draw from revolving credit lines from which they can borrow, pay back and borrow again.
“We’re seeing that many in the industry view the market with more optimism,” said Jeff Nichols, co-chair of the energy practice group at Haynes & Boone, in a statement.
The majority of those surveyed they expect borrowing bases to rise 10 percent above previous levels set in the fall. Banks reassess borrowing bases twice a year, once in the fall, and once in the spring.