Few U.S. oil and gas companies repay small business COVID-19 loans

NEW YORK, May 19 (Reuters) – U.S. securities filings show that only three of 12 listed oil and gas companies that received emergency government aid made available to small businesses said they would return it before the deadline for companies that do not need the funds to do this.

The US Treasury Department has offered an amnesty to state-owned companies that repay the money they borrowed before May 18, saying it would consider them to have made the request in good faith due to fueling economic uncertainty. by the coronavirus epidemic, before the guidelines were clarified.

The country’s energy sector is clamoring for government help following the drop in oil prices that has led several indebted exploration and production companies to bankruptcy.

While President Donald Trump said last month that his administration would develop a plan to help the oil and gas industry, no specific help has been announced. This has left energy companies seeking relief under the broader US $ 2.3 trillion stimulus package.

One aspect of the latter that has been used by oil and gas companies is the so-called Paycheck Protection Program (P3) for small businesses, offering loans that can be canceled to cover salary expenses, as well as mortgage interest, rent and utility costs. .

Denver-based exploration and production company PDC Energy Inc, which has a market cap of $ 1.3 billion, said on May 8 that it had paid off its $ 10 million PPP loan.

Natural Gas Services Group also repaid its PPP loan of $ 4.6 million. Its chief executive, Stephen Taylor, said the Midland, Texas-based compression equipment supplier had to cut 20% of its workforce after paying back the funds.

State-owned companies and their employees were “discriminated against” by a “politically motivated process,” Taylor told analysts during the company’s first-quarter earnings call on May 7.

Dawson Geophysical Co made its $ 6.4 million PPP loan last week, the company said in a May 14 filing. Midland-based Dawson, which produces seismic data for oil and gas companies, cited “great caution” and new directions for the decision.

Among those who received loans, but had not disclosed whether they would return the funds on Monday, were Calumet Specialty Products. The Indianapolis-based refiner has received $ 31.4 million in five PPP applications.

Exploration companies Amplify Energy Corp and Battalion Oil Corp received $ 5.5 million and $ 2.2 million, respectively. Houston-based land driller Independence Contract Drilling has secured a $ 10 million PPP loan.

The quartet, along with the five other listed oil and gas companies that have received PPP loans, did not respond to requests for comment.

Energy companies have also benefited from the emergency tax reform enacted in the wake of the pandemic.

More than $ 2 billion in benefits were recorded by 43 combined companies due to two tax code changes, including one to offset current losses with past income tax bills, a Reuters review found first quarter income tax returns. (Reporting by David French in New York; Editing by Greg Roumeliotis and Kenneth Maxwell)

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