The Financing of Oil and Gas Transactions


  • Robert E. Sullivan



Energy Law, Petroleum Law


The search for oil is synonymous with the search for funds to finance the activities involved in the exploration and production of oil and gas. This article submits that the uniqueness of oil and gas financing is directly related to the nature, occurrence and production of petroleum and states that oil and gas financing is affected by the stage of development of the reservoir, the nature of oil and gas rights acquired and the extent of government regulation, including securities, conservation and taxation. The stability provided by comprehensive conservation laws has greatly facilitated oil and gas financing by making proven oil reserves an acceptable form of security for loans. The article concludes with a discussion of the .effect of taxation on oil and gas financing in the United States.