Path Forward: Borrowing Base Redeterminations In A Restructuring World


Opportune LLP Managing Director David Morris has his finger on the pulse of the oil and gas industry, which makes him uniquely qualified to assess the shifts in the industry as a response to the uncertainty surrounding the COVID-19 pandemic and its ripple effects on commodity price volatility, forcing many companies to file for bankruptcy or enter into restructuring arrangements.

Regarding the wave of bankruptcies in the industry this year, Morris says it boils down to a convergence of a variety of negative factors, some of which began before the pandemic.

“When I reflect upon it, the first things that come to mind for me are too much debt, too little hedging, price shocks, and demand depression and destruction. Those are certainly four factors that have been at play this year,” Morris says. “We knew going into this year that there were a lot of E&P companies that still had too much debt.”

The combination of too much debt and too little hedging, combined with the onset of the pandemic, which Morris says added insult to industry, resulted in a perfect storm for financial distress.

There’s also been a contraction in the number of lenders operating in the reserve-based lending, or RBL, space, a trend that Morris believes will continue unless there’s a drastic shift in the direction of the oil and gas industry.

Among those banks still committed to RBLs, Morris says there’s a movement for higher holds. In general, Morris also believes that banks will be more conservative in lending for quite a while, though he stops short of forecasting a permanent change brought on by the current downturn.

Follow us on social media for the latest updates in B2B!

Twitter – @MarketScale
Facebook –
LinkedIn –

Follow us on social media for the latest updates in B2B!


US Inflation Expectations Extend Retreat, Buoy Consumers’ Mood
January 30, 2023

(Bloomberg) — US short- and long-term inflation expectations improved at the end of January, helping to once again boost consumer sentiment. Respondents said they expect prices to advance 3.9% over the next year, the lowest since April 2021, the University of Michigan’s final survey reading showed Friday. The sentiment index climbed to 64.9 from earlier […]

Read More
How Companies Can Benefit from Working with Volta Insight
January 30, 2023

Driving Technology Solutions for a more sustainable future doesn’t happen in a bubble. Commercial HVAC Service providers like Service Logic rely on close relationships to improve what they do and vice versa. One partnership Service Logic values is the one they have with Volta Energy.  Volta Knowledge host Tyler Kern wanted to learn more […]

Read More
Here Come the Little Electric Pickup Trucks
January 29, 2023

(Bloomberg) —Having zipped from six-figure sedans to Costco-crushing SUVs, electrification is finally zeroing in on the auto industry’s most esoteric form: the tiny pickup truck. At least two major carmakers are considering adding small, battery-powered pickups to their growing parade of EVs.At General Motors Co., spokesman Stuart Fowle says a pint-sized pickup is one of several […]

Read More