Bank financing, once a widely used tool of the energy industry, is used much less frequently due to the instability of the oil and gas industry and various problems in the banking industry. Banks will take some calculated risks, but are reluctant to invest in companies or industries which are not fully understood.

This paper is designed to give independent producers a system to bridge the information gap and educate their banker. It allows the producer and banker to evaluate the company's ability to borrow and repay money, and will also help to evaluate the risks incurred at different levels of borrowing. Budgeting from a combination of historical financial information, future drilling and development plans and engineered proved producing properties will provide a hybrid forecast from which educated lending decisions may be made.

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