Production Lending LLC recently closed on a debt investment in a historic Texas oil field, said the Houston-based specialty finance capital provider catering to small oil and gas companies.
According to a July 29 release, a private oil and gas company backed by Chahta Equity Partners Ltd. received the $4.5 million bridge loan for deployment in the Raccoon Bend Field in Texas. Production Lending said it closed and funded the loan on July 24.
Raccoon Bend oil field, a salt dome located along the Brazos River in Austin and Waller counties, Texas, currently produces more than 800 barrels per day. The field has produced more than 113 million barrels of oil since its discovery in the late 1920’s by Humble Oil Co., which later became Exxon Mobil Corp.
The undisclosed private company will use the loan to finance an acquisition of nonoperated interest in the Raccoon Bend Field plus drilling and completion capex.
Production Lending said it structured the investment as a short-term bridge loan on Chahta’s request to provide flexibility to refinance with conventional bank debt at any time.
Chahta Equity Partners is owned by Ryan Messer and Randall Eddington, who also own and operate Blackrock Midstream, a midstream marketing and blending business that caters to smaller producers seeking custom midstream solutions.
Commenting on the transaction with Production Lending, Messer said: “Production Lending’s closing process was very quick, simple and transparent, and their team was very responsive. We are very excited about this transaction and look forward to our partnership with Production Lending.”
Production Lending is owned and run by two former energy bankers, Abhishek Kumar and Ryan Childs, who have underwritten financing transactions worth more than $60 billion over their careers. Their business specializes in providing growth and acquisition financing in the form of short-term bridge capital and longer tenor debt and preferred equity investments throughout the Lower 48.
Since August 2016, Production Lending has funded 16 different transactions for a total capital commitment of more than $35 million, according to the company press release.
In May, Production Lending said it closed a $7 million bridge loan with a private oil and gas company backed by Energy Founders Fund LP (EFF).
Editor's note: This story was updated at 12:28 p.m. CDT July 30, 2019.
Recommended Reading
Paisie: OPEC+ Will Be Able to Manage Prices
2024-07-11 - Disappointing economic news has contributed to a drop in oil prices.
TotalEnergies Joins Ruwais LNG Project in UAE
2024-07-11 - French energy giant TotalEneriges joined the two-train 9.6 million tonnes per annum Ruwais LNG project in the United Arab Emirates with a 10% interest. The LNG project is expected to start sending out cargos in the second half of 2028.
DC Appeals Court Sends Louisiana LNG Permit Decision Back to FERC
2024-07-17 - The Washington D.C. Court of Appeals' decision follows a railroad dispute headed to the Supreme Court this fall.
Pemex Reduces Fuel Thefts as US-Mexico Energy Trade Value Dips
2024-07-15 - Mexico, the largest export market for U.S. petroleum products, expects to lessen its foreign fuel dependence as its builds a new $16 billion refinery.
Freeport LNG’s Slow Restart Stokes Concern Over Supply Risk
2024-07-23 - The 15-mtpa Freeport LNG facility remains under the spotlight of the global market as it slowly resumes operations after pausing ahead of Hurricane Beryl’s arrival along the U.S. Gulf Coast.