however, I do "know" that in order to enter into a borrowing base agreement, one needs to ensure that the asset doesn't have an exsisting lien over it .........
next - one can use the "market" to get an idea as to what level of borrowings the banks will forward ...........(hint - its circa 60-65% of PDP at fwd strip)......
next - banks do not take fwd price risk - so their will be a heding program..........banks are "happy" to write this type of businesses - b/c they make a margin on the hedge agreements........
finally, I can always check market comparables, and then ask "how much of the "PUD" is in the share prices, versus other shale plays.........
I always rekon its better to er on the side of caution........but that's just me.
kind regards
Value_Hunter
FDM Price at posting:
26.0¢ Sentiment: None Disclosure: Not Held