What Low Oil Prices Mean for Institutional Investors


Institutional investors such as pensions, sovereign wealth funds and private equity funds have allocated billions to U.S. energy companies. This committed capital, much of it based on the lofty assumption of oil prices hovering around US$ 90 to US$ 110 per barrel, was put to invest in oil and exploration projects, as well as production developments. Many of these companies borrowed big time, getting credit from hedge funds, private equity funds and asset owners like pension funds and sovereign funds. For example, in January 2015, Austin-based WBH Energy, a shale oil and gas producer who had leases in the Fort Worth Basin, filed for bankruptcy protection. In September 2014, Castlelake (formerly known as TPG Credit) declined to extend additional credit to WBH Energy.

Oil Giants Raise Debt

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