Engineering the Oil Loan
- Jerol M. Sonosky (California Bank)
- Document ID
- Society of Petroleum Engineers
- Journal of Petroleum Technology
- Publication Date
- January 1961
- Document Type
- Journal Paper
- 19 - 23
- 1961. Original copyright American Institute of Mining, Metallurgical, and Petroleum Engineers, Inc. Copyright has expired.
- 7.4 Energy Economics
- 2 in the last 30 days
- 148 since 2007
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Several discussions have appeared in the literature recently regarding the data required and the factors involved in determining the amount of money which a bank may loan on oil and gas production. The purpose of this paper is to present the actual mechanics of applying these factors, pointing out their importance in the determination of loan value. The required data and applicable factors will be presented, including a step-by-step analysis of the procedures to be used. Also, examples will be discussed to present the type of results obtained and decisions required for loan analyses at various stages of reservoir depletion.
It should be kept in mind that, although the criteria presented are typical, they are by no means final, because the proper solution of the problem involves many variables which may affect each property differently. Furthermore, the actual evaluation may require additional types of analyses other than those presented, depending on the type of loan, operator, property, etc. This discussion is intended as a guide for the engineer whether he works for an operator, consultant or bank - in determining the amount of loan which a given property can safely handle so that he may properly advise his management of the engineering validity of the transaction.
|File Size||491 KB||Number of Pages||5|