Oil & Gas Project Financing Problematic | Business Factors
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Oil and Gas Project Financing Can be Problematic

Sourcing oil and gas project financing for the newest shale drilling, extraction and production projects remains problematic. The companies behind these potentially lucrative fracturing projects often have a hard time obtaining enough cash to purchase or lease all the drilling equipment and pipeline materials they need. The upfront cost of such oil and gas ventures is a serious investment that has proven to be somewhat prohibitive to many.

Oil and Gas Loans May be Difficult to Secure from Bank

Financing oil and gas projects in the USAIt is not uncommon for oil and gas financing projects to require a healthy dose of optimism as well as cash. Though such projects need a ton of upfront investment, the results of such ventures are not guaranteed. Despite the best technology and knowledge available, even the most promising drilling projects may not always produce optimal results. For these reasons and more, oil and gas loans from traditional banks are hard to come by. The very nature of its business is high risk and many banks won’t touch it. This is part of the reason oil and gas factoring continues to grow.

Financing Oil and Gas Projects Can be Dicey

In addition to being willing to take on the risk that is inherent in oil and gas project financing, factoring receivables is an attractive option to oil and gas companies because they work quickly. Most factoring services can be conducted in a matter of days rather than weeks and this is crucial when time is money and every day in shale gas production costs thousands of dollars. Opportunities for drilling and extraction are somewhat unpredictable and if one company can come up with the funding to move ahead on a potentially lucrative project, you can be sure a competing company will.

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About the Author:

author image Since 1991 I specialize in Invoice Factoring, PO financing and ABL facilities. I currently work internationally with companies in the US and Canada via our internet marketing division. Specialties: Accounts Receivable Factoring and Payroll Funding for Manufacturing, Oil & Gas, Telecommunications, Wholesale Trade Distribution, Staffing and Transportation. I always enjoy helping companies rise to the next level of success.

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