Working with the banks, for the client
A Client was planning an asset acquisition of an asset that provided multiple development opportunities and required a significant CapEx budget. Their lender required that all PDP and some PUDs be hedged to fund the acquisition, but the producer wanted to keep hedges down to 80% of PDPs.
R^2 used the bank’s price deck to calculate the present value of the risk that would be removed by the bank’s hedge requirements. Then we developed and got approved an new hedge strategy that complied the producer’s 80% benchmark, ensured that future revenues would be sufficient to repay the note and provided for the funding of all planned drilling projects.
Case Studies
Read how we've helped our clients in the following areas: