A more favorable commodities market for oil and gas prices often has led to more U.S. drilling activity, but producers into 2024 may face volatility and less-than-enthusiastic lenders, according to a new survey by Haynes and Boone LLP.

The law firm’s semi-annual Borrowing Base Redeterminations Survey found that exploration and production (E&P) companies may not seek reserve-based lending (RBL), even with the stronger commodity prices. 

Lending redeterminations are done twice a year, as the value of an upstream E&P’s oil and natural gas reserves changes with prices. An RBL is structured as a revolving loan, with credit availability based on the current value of the reserves. The survey of more than 100 executives who work at E&Ps, financial institutions, private equity firms...