We assist corporate entities that need growth and expansion funding for Oil and Gas projects. Requirements in funding may vary from development drilling (e.g. bypassed pay, in-fill wells, re-completions), production acquisition, infrastructure, processing equipment, applying proven technology or startup of a new service company.
Capital Needed for Oil and Gas Projects
The oil and gas industry has been experiencing major investment opportunities topping the $700 billion mark in 2013. This record level of investment is set against a backdrop of over the next 20 years to finance its contribution to the world’s future energy needs. Despite the industry’s immense appetite for capital, compared to other infrastructure sectors, it has been relatively conservative when it comes to financial structuring.
In addition to traditional sources of capital, more will help to ensure that sufficient and efficient funding is available to finance projects in the future. In response to heightened political and economic instability, companies have begun to diversify their sources of funding. This has involved a shift from bank-led financing to non-bank and capital markets-based funding.
Innovative Solutions; Funding Oil and Gas Companies.
Compared with other capital intensive industries such as power and utilities, project financing has been less widely used by the oil and gas industry. The industry is inherently long term in nature which can be a challenge when trying to arrange project financing on acceptable terms. Future revenue streams are typically less stable and predictable in oil and gas projects than in other large-scale infrastructure projects, which may have regulated or inflation linked returns and are not directly exposed to commodity price risk.
The logistics, infrastructure and social issues caused by the increased size of projects have made achieving time, cost and quality targets more challenging than ever. The industry’s relatively poor recent track record of completing projects on-time and on-budget will test banking sector appetite for lending to the oil and gas sector. The pool of providers also diminishes as the length and size of the increases.
Most mid to large independent oil and gas companies prefer the public bond market as a source of capital although the private placement market has important liquidity sources. There is potential for the high yield capital market to provide further support to the independent oil and gas sector.
We can finance oil and gas production facility within each sector shown above. As the market is stagnant due to over production there are many funding options available.