Energy issues ///

One would not think that famed American poet Robert Frost would, in the 1950s, have the understanding and foresight to predict the condition of energy funding sources in 2016. But he did, noting that “a bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain.” Well said, Mr. Frost. Until a year or two ago, access to capital—to finance shale development and, to a lesser extent, deepwater development—from lending institutions was fairly easy. The vast majority of these loans were secured by, and based on the value of, the oil and gas reserves owned by the producer. The fall of oil and gas prices has resulted, according to analysts at AlixPartners (The shift to equity: Is there a return to historical norms?), in redetermination of the value of the reserves held as collateral. This twice-yearly redetermination process has led, says the group, to “a wave of in-court and out-of-court restructurings.” More specifically, the analysts found that:

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