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May 31, 2018 · 1 min read

Will shale’s debt refinancing reduce debt or add to it?

Tom KirkmanIndependent Project Manager

Due to higher oil prices, many U.S. Shale Oil companies are starting to refinance their debt from the last boom a few years ago.

My key question: …

● Will “refinancing debt” actually mean adding new debt, or actually paying off some of the old debt? ●

If “refinancing debt” for fracking means getting another shiny new credit card to make payments on old credit cards, then there will be one heckuva financial train wreck down the track.

If “refinancing debt” for fracking means restructuring to get lower interest rates so loans can be repaid faster, and debts actually reduced, then that is wonderful news.

Waiting to see how this plays out.

oilprice.com ↗

FROM THE THREAD

Tom's notes 3

  1. Tom Kirkman

    Ian, I expect some "creative financing" is currently ongoing.
    Opaque refinancing" seems a suitable description.
    ● Smart, responsible operators will sieze the opportunity to actually pay down debts.
    ● Others may decide to get a shiny new credit card and gamble some more using other people's money.

  2. Tom Kirkman

    But this time it's *different* !

  3. Tom Kirkman

    But this time around, interest rates will be higher.

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