Available reserve-based lending (RBL) capital for exploration and production (E&P) companies is likely to shrink by 10-20% in the fall redetermination season, according to the latest biannual survey conducted by Haynes and Boone LLP.

The law firm conducts surveys ahead of the spring and fall redetermination seasons for RBL, a common type of financing for North American onshore producers. The twice-yearly redetermination process protects lenders from commodity price fluctuations.

Results showed a slight improvement in sentiment from the spring 2020 survey, which saw most respondents predicting a borrowing base decline of at least 20%, researchers said.

However, “most producers have limited availability under their borrowing bases and are not in a position to absorb even a...