The Globe and Mail reports in its Friday edition that access to credit is crucial to the energy industry's survival in the time of COVID-19. The Globe's Jeffrey Jones writes that industry officials have suggested ways to help banks and other lenders to energy companies offer leniency on debt terms. At stake are thousands of jobs in exploration and production as well as oil field services.
Bond-rating agencies emphasized the trouble in reports on Thursday, saying the credit situation will likely worsen. In a report this week titled A
Breach in the Levee? Bank of Nova Scotia weighed the risks of exploration and production firms breaching debt covenants should crude prices remain depressed this year and next. Small- and mid-size oil producers such as Baytex Energy, Bonavista Petroleum, Delphi Energy and Paramount Resources are the most vulnerable. The reasons vary -- from exposure to depressed heavy oil prices to approaching debt maturities to worsening debt-to-cash flow ratios. Among the best positioned for the times are Advantage Oil & Gas, ARC Resources, Birchcliff Energy, PrairieSky Royalty and Tourmaline Oil -- companies where output is more natural gas than oil, or which provide lands for other producers.
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