U.S. oil and gas producers expect their borrowing ability to increase over the next few months leaving them open to invest in new shale assets, particularly the Eagle Ford in Texas, a survey said.
More than 80 percent of respondents to a survey by Haynes and Boone LLP said their borrowing bases, or credit availability backed by collateral, will likely increase as banks conduct their biannual reviews, the law firm said Tuesday. That may benefit the Eagle Ford and nearby Austin Chalk as the “next big play,” the study said.
The Eagle Ford is already an established shale play, generating about 12 percent of the U.S.’s daily oil, but it’s been receiving more attention of late. While the formation produces only about a third of the oil from the nearby Permian Basin, the country’s most prolific field, the south Texas field is closer to the Gulf Coast’s network of refineries and pipelines and acreage is typically cheaper. [read more]