Oil well loan

Board Topic: Oil Well
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Oil Well

Posted by: North Peace Dec 3 2004, 05:42 PM
Is anyone know how we can get financing to buy a producing oil well?
What is my environmental risk?


Posted by: loanuniverse Dec 3 2004, 07:25 PM
Talk about specialized financing! I really can’t help you here. I don’t think there is a single producing oil well within 200 miles of my location. I also doubt that this could be something that can be answered by the other lenders that normally visit here as only a small percentage deal with true “business” loans, and most lend on real estate.

I can take a couple of educated guesses and share some thoughts.

1. I think that the environmental risk could be mitigated with insurance.

2. The value of the well is only as good as the amount of reserves in the ground. You need to be careful about how you read whatever reports are given to you.

3. I think is a safe bet to say that the land around the well is probably contaminated with hydrocarbons.

4. Would you be responsible for that clean up?

5. Your best bet is doing web searches for industry sites, and maybe you are lucky and find some specialized Texan bank website.

Good luck

Posted by: Tim Dec 5 2004, 07:35 PM
I know of an equipment lease lender who leases a lot of "poor collateral" systems. I don't know if they have done oil wells but if you email me more financial details I could look into it. The sale might be financed by separating the land purchase from the well purchase.


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