Banks poised to squeeze oil companies into asset sales

"Starting in earnest after Labor Day, oil and natural gas companies will begin the twice-yearly pilgrimage to their banks to discuss funding. It’s not going to be easy, with companies from Penn West Petroleum Ltd. to Athabasca Oil Co. under pressure to sell assets to keep the money flowing. With no relief from the price of oil, which has tumbled under US$50 a barrel, companies are cutting more staff, reducing dividends and even selling hedging positions on commodities and currencies to boost cash flow. Banks will next likely force some producers to sell their best assets to avert bankruptcy, said Rafi Tahmazian, senior portfolio manager at Canoe Financial LP in Calgary. “The banks are going to tell these guys to sell their coveted assets,” said Tahmazian, who helps manage about $1 billion in energy funds. “That means the strong companies get to lick their chops.”" Click for Full Text at FP