Sabine Oil & Gas Corp., the exploration and production company that merged with Forest Oil Corp. last year, said its banks may cut its fully drawn $1 billion credit line after oil prices plunged.
“Based on discussions with the lenders under the revolving credit facility, the company believes that its borrowing base may be reduced significantly,” Sabine said Tuesday in an earnings statement.
Sabine had fully drawn its $1 billion revolving credit line as of March 15, according to the statement. The Houston-based company had about $327 million in cash on hand.
The potential credit squeeze has raised “substantial doubt” about the company’s ability to continue as a going concern, according to the statement.
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