Several experts predict increased activity in 2017
It’s no secret that 2016 frustrated many in the oil and gas sector, especially in Arundel’s home province of Alberta. But relief looks to be in sight, as Deloitte predicts an average around $55 US a barrel in 2017 for West Texas Intermediate.
As an Alberta-based company, Arundel lends to oilfield services more than any other industry sector. An increase in exploration and production—drilling new wells, completing existing wells, and producing shut-in wells—means that our oilfield services clients need to deploy more equipment. Since January of 2015, many oilfield services companies have been reducing fleet sizes and selling equipment into other markets; now, with exploration and production ramping up, they are once again expanding.
Over the course of the economic downturn, the balance sheets and income statements of many clients within the oil and gas sector have become badly bruised, with lower revenues, thinner margins, tighter bank covenants, and less access to capital. Arundel continued to fund this sector throughout the downturn, and as an agile independent lender, is able to fund based on assets, as well as cash flow to be generated by the asset being acquired. Traditional lending formulas used by the larger leasing companies and banks do not account for this. Arundel understands that while the increase in work with this sector will take months, or even years to show up on their financial statements, clients need a lender who can move quickly and look at what is happening now.
In the coming months, Arundel is looking to fund:
· new equipment being acquired through equipment dealers;
· used equipment from other contractors (private sales);
· pre-approvals at upcoming auctions, and
· sale and lease-backs on existing equipment that can generate working capital required through the ramp up phase on new or increased contracts.
Arundel can provide funding for transactions up to $1 million, while transactions up to $5 million can be completed with syndication partners.
Contact Sean Rowan, Vice President, to see how Arundel can help increase your business, at (403) 287-9597.
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