Increased optimism for a recovery in the oil and gas sector has taken hold among lenders and borrowers alike as banks show a greater willingness to maintain or expand borrowing bases for producers, an industry survey found.

A survey by the law firm Haynes and Boone LLP found 76% of 163 oil and gas borrower and lender respondents said they believe that borrowing bases will either increase or remain the same for producers in 2017. Only 59% felt that way in a fall 2016 survey.

"Overall, the outlook is positive," the firm said. "The survey respondents anticipate a smaller percentage of E&P borrowers will see a decrease in their borrowing base redeterminations in spring 2017 (24% in spring 2017 as compared to 41% in the fall of 2016)."

Nearly half of the respondents in the March survey said they believe borrowing bases, which are reassessed twice a year, will increase by between 10% and 30% in spring. "We're seeing that many in the industry view the market with more optimism," said Houston Partner Jeff Nichols, co-chair of Haynes and Boone's Energy Practice Group.

The survey results come amid ongoing signs that the North American exploration and production sector has weathered a commodity price downturn that started in 2014 when oil was above $100 per barrel and reached bottom in February 2016 at under $30. The financial upheaval caused many lenders to cut producers' borrowing bases, forcing some into default. More than 100 producers filed for bankruptcy protection.

In other signs of optimism for oil and gas finances, nearly 90% of respondents said they expect E&P budgets for producers to expand in 2017, with 45% anticipating increases of 20% or more. The survey showed that twice as many respondents, 6%, expected budget increases of 30% than expected decreases, 3%.

The threat of bankruptcy appears to be slackening as well. In the last two surveys, done in the spring and fall of 2016, 13% of respondents said bankruptcy was the most likely way to deal with a borrowing base deficiency; that number fell to just 3% in the latest poll.

Buddy Clark, who co-chairs Haynes and Boone's energy practice, said there is a clear increase in positive sentiment across the board, but the lessons of the past several years remain fresh. "The responses reflect a cautious optimism among producers and bankers for the road ahead, but I think everyone is still mindful of the capital destruction plainly visible in the rearview mirror," he said.