O & G Borrowing Base Redetermination

The Borrowing Base will be redetermined multiple times over the life of loan.  The frequency of redetermination is negotiated (OCC mandates at least semi-annually).  Redetermination can be event-driven or borrower initiated (motivations for determination can vary).  This can present unique perils for E&P companies during challenging periods.  A large undrawn revolver may be meaningless in terms of liquidity.