U.S. shale drillers are set to ramp up spending on exploration and production next year as recovering oil prices prompt banks to extend credit lines for the first time in two years.
The credit increase is small, but with major oil producers worldwide aiming to hold down production in 2017, U.S.-based shale drillers are looking to boost market share to take advantage of higher prices, and greater availability of capital will make that easier.
A number of shale producers including Pioneer Natural Resources Co (PXD.N), Diamondback Energy Inc (FANG.O) and RSP Permian Inc (RSPP.N) have forecast bigger budgets and increased output for next year.
Every six months, oil and gas producers negotiate credit with banks based on the value of reserves in the ground. Through the latest round of talks in the fall, 34 companies had their available credit lines raised an average of about 5 percent, or more than $1.3 billion, according to data compiled by Reuters.
The combined bank credit for the companies stood at $30.3 billion, compared with $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.
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