US shale drillers are poised to step up spending on exploration and production activities next year, thanks to recovering oil prices and increased bank funding, Reuters reports.
Shale firms could ramp up capital investments by 30 percent in 2017 as banks extend credit lines for the first time in two years, the report said, citing analysts at Raymond James.
With major oil producers worldwide aiming to hold down output in the coming year, US shale drillers are looking to boost market share to take advantage of higher prices.
A number of shale producers including Pioneer Natural Resources, Diamondback Energy and RSP Permian have forecast bigger budgets and increased output for next year, according to the report.
In a recent round of talks with banks, 34 shale companies had their available credit lines raised an average of about 5 percent, or more than US$1.3 billion, according to data compiled by Reuters.
The combined bank credit for the companies stood at US$30.3 billion, compared with US$28.9 billion at the end of spring 2016.
The industry’s available credit had been cut by 40 percent over the past three reviews as it contended with a two-year price rout.
“The ‘animal spirits,’ seem to be coming back to the exploration and production market, albeit slowly,” the report cited Reorg Research analyst Kyle Owusu as saying.
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