7670 Woodway Drive
Suite 200
Houston, TX 77063
     
   
Reserve-based lending began in onshore Texas in the 1970s before spreading to off-shore, the North Sea and subsequently to other geographies as well as emerging markets. The general structure enabled smaller producers as well as major Oil & Gas producers to leverage their balance sheet to meet planned capital expenditures. Lenders were able to gain comfort from – and a lien over – such assets as long as enough proven reserves remained unencumbered to secure the loan. Although recourse was to the production companies, many of these were in effect project companies with the loan’s proceeds used to develop the fields – making reserve-based lending a hybrid of project finance, corporate finance and asset backed finance.
 
 
 
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