Vine Oil & Gas LP is offering lenders above-average yields to fund its purchase of natural gas fields from Royal Dutch Shell Plc (NYSE: RDS-A, RDS-B), as the value of debt sold by energy companies declines, Bloomberg said Dec. 2.

The Blackstone Group LP-backed exploration and production (E&P) company is proposing to pay as much as 7 percentage points more than the Libor rate on a $500 million, first-lien term loan maturing in seven years, according to a person with knowledge of the transaction who asked not to be identified without authorization to speak publicly. That compares with an average spread of 4.68 percentage points for new first-lien loans as of Nov. 26, according to Standard & Poor’s Capital IQ Leveraged Commentary & Data.

The Dallas-based shale driller is seeking $850 million of term loans to fund the purchase of natural gas assets from Shell amid a bear market for oil that’s spurred a plunge in the value of debt tied to energy firms. Benchmark oil prices reached a 5-year-low of $63.72 a barrel (bbl) this week, and natural gas is still 76% below its 2005 peak.

Morgan Stanley (NYSE: MS), HSBC Holdings Plc, Credit Suisse Group AG (NYSE: CS), Societe Generale SA and Natixis SA (PARIS: KN.PA) are arranging the financing for Vine’s $1.2 billion purchase of about 107,000 acres in Louisiana’s Haynesville shale basin, according to data compiled by Bloomberg. A $350 million, second-lien piece was proposed with a spread of as much as 9 percentage points and might be sold for as little as 90 cents on the dollar, the person said.

Blackstone (NYSE: BX) formed the company earlier this year with the goal of turning it into a “significant, independent shale development company,” according to an Aug. 14 statement announcing the deal with Shell. The acquisition is expected to close by the end of the year.

Natural gas collapsed to a 10-year low of $1.902 per million British thermal units (MMBtu) in April 2012 from as much as $15.780/MMBtu in December 2005, as advances in shale drilling released record supplies. Companies including BHP Billiton Ltd. (NYSE: BHP), Shell and BP Plc (NYSE: BP) wrote down more than $5 billion and drillers shifted their focus to oil, which sold for about six times more in 2012.

Natural gas closed Dec. 3 at $3.874, whereas drilling in the Haynesville breaks even at as little as $3.47, depending upon the location, according to Bloomberg New Energy Finance. West Texas Intermediate crude, the U.S. benchmark, settled at $66.88/bbl in New York Dec. 3, down 30% since Vine announced its deal for the Haynesville properties.

Vine’s lenders are being offered the larger loan at a discount of 98 cents on the dollar, according to the person. Commitments are due by Dec. 15. Both pieces will have a 1% minimum on Libor.

In late October, oilfield-services provider Express Energy Services began seeking a $220 million term loan for its buyout by Apollo Global Management LLC, offering similar terms to investors, Bloomberg data show.

The Houston-based company initially proposed paying 6.75 percentage points more than Libor, with a 1% minimum on the lending benchmark, the data show. Investors were offered the debt at a discount of 98.5 cents, Bloomberg data show.

Apollo is relying on UBS AG (NYSE: UBS) to lead the financing, which is still being marketed to lenders, according to two people with knowledge of the deal, who asked not to be identified because the transaction is private.

Express operates in shale regions including the Bakken, Barnett, Haynesville, Marcellus and Utica.