Its unlikely that banks will lend enough to allow the loan to be "paid in full"
The reserve report on Aug 21st 2014 was for reserves as June 30th. WTI had been above $100 for several months and the report made an assumption that there would be constant pricing of $101. Even at the time. this was generous to say the least. With the drop in oil, the new oil futures curves are manifestly more conservative.
Exhibit 2 in the link below shows the latest Brent futures curve and how it compares to the June 30 curve (ie when the report was commissioned). WTI will be $5-10 less than this.
I just cant see how they can refinance. They would get more from a sale, perhaps enough to pay out the loan and keep the company going but they have chosen the worst time to sell an oil asset.......
RFE Price at posting:
1.1¢ Sentiment: None Disclosure: Not Held
