In December, 2022, Production Lending closed and funded a $8,500,000 loan to a private, Louisiana-based oil and gas company. Initial proceeds from the loan were used to payoff an existing lender and to pay the AFE’s of several horizontal natural gas wells that the company had participated in.
The company is a minerals-focused firm that acquires mineral acreage and leases in the Haynesville shale play. Production Lending’s investment will allow the company to expand its AFE business by participating in the development of more horizontal wells without the need to sell additionally equity. The loan was structured to provide the company with flexibility around principal payments, additional development proceeds and early prepayment of the facility.
Through its network, Production Lending also setup company with a hedging counterparty so that it could lock in natural gas prices above $5.50/mcf for the next 18 months, all without posting any margin.
Production Lending is a Houston, TX based firm focused on secured debt investment opportunities in small, private, US-onshore oil and gas companies. It 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, longer tenor debt and preferred equity investments throughout United States.
Since August 2016, Production Lending has funded 31 debt transactions for a total capital commitment of more than $125 million, along with an additional 12 preferred equity transactions worth more than $15 million. The firm specializes in providing growth and acquisition financing in the form of short-term bridge capital, longer tenor debt and preferred equity investments throughout the U.S. More information about Production Lending can be found at www.productionlending.com.