In these volatile times, it’s a good idea for operators and lenders to review what they know about standard credit agreements for financing E&P companies.
As petroleum prices skyrocketed during the past several years, the risk-reward calculus shifted, and numerous lenders entered the upstream market. This influx of capital resulted in a surge of debt financings for E&P companies from lenders with limited experience in this area of the oil and gas industry.
Some lenders use their standard-form credit agreement when making loans to oil and gas companies. The loan officers are familiar with the widely used form, and it works effectively in secured financings of most borrowers in most industries. [more]