Oct 20, 2016
High bank fees prompt Toro Oil & Gas to ditch line of credit
By Andrew Bell
Bank fees and troublesome negotiations have prompted the CEO of a Toro Oil & Gas (TOO.V) to drop its bank line of credit, company CEO Barry Olson tells BNN.
Toro, a junior oil company that produced about 800 barrels of oil equivalents per day in Q2, said the company dropped its facility with National Bank of Canada after he could not justify the levies. "Why pay these service fees that the bank is charging us?’”
Olson says bankers have adopted a hardnosed attitude to small producers and service firms but he says it’s directed by head offices back east.
“The banks in general, not just National, are taking a very tough stance on junior companies and small-cap sector companies.”
He said Toro “took a little bit of debt on going into 2016 and that caused kind of an adverse reaction with the bank ... Our negotiations with the bank have been really very disruptive.”
The Toro CEO thinks bankers’ impatience with small energy companies has emanated from head offices. “The decisions are no longer being made in Calgary,” says Olson. “They’re not relationship-based decisions … It’s become very impersonal.”
