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Small oil-and-gas companies get cold shoulder from large banks
 NEW YORK (Reuters) - The largest banking lenders to the oil and gas sector are becoming more cautious, marking down their expectations for oil and gas prices that underpin loans in a move expected to put further financial stress on struggling producers, industry and banking sources said.Major banks including JPMorgan Chase (JPM.N), Wells Fargo (WFC.N), and Royal Bank of Canada (RY.TO) have, as part of regular biannual reviews, cut their estimated values for oil-and-gas companies’ reserves, which serve as the basis for those companies to receive reserve-based loans (RBLs), according to more than a dozen sources familiar with the activity. While the size of the RBL market is unclear, it is estimated that a few hundred companies take such loans, with the cumulative size in the billions of dollars. Those lenders have marked down the perceived value for both oil and natural gas for the coming five years, with the changes kicking in as early as this month. Posted by: Besoeker 2019-10-28 |
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