Financing the Upstream Oil and Gas Transaction


This practice note discusses financing an upstream oil and gas transaction by detailing different facets of debt financing, equity financing, and joint ventures. Upstream oil and gas companies potentially have a variety of financing sources to support their operations. The choice and mix of capital utilized is a business decision based upon size, financial situation ,and capital needs of the company; the state of equity and debt markets; the current development status of the company's oil and gas reserves; and the expected uses of the desired capital. This note discusses the customary features of typical debt financings, equity financings, and certain joint venture structures employed by non-investment grade, privately held, upstream oil and gas companies in the United States.