Finding a lending niche is the key to staying one step ahead of the competition and commodity-price fluctuations, according to some of the energy lenders at the recent midyear NAPE in Houston. A representative of one Texas-based bank said its energy-lending business is still booming, thanks to its focus on smaller, independent E&P companies. "We do loans as small as $50,000 and go up to around $7 million. Competition in our space isn't as rough because of the kinds of financings we do. It isn't until a client is looking for loans that are larger than $10 million that it becomes more challenging for us to compete." Clients want funding to always be available in case a great project comes along, and this hasn't changed in the face of fluctuating oil and gas prices, the banker added. "Those high prices are good for our customers, which in turn is good for us. The changes in natural gas pricing haven't affected the number of energy financings we do." Concord, California-based Harwood Capital executives aren't experiencing any slowdown in placing capital, either. The firm specializes in early-stage venture capital from $50,000 to $20 million, depending on the project, said Tom Swaney, president. Harwood was formed in 1990 to finance and manage oil and gas projects in the Lower 48 and India, Papua New Guinea, Fiji and China. Swaney said geologists often approach Harwood with project plans, and the firm provides the capital to get the seismic and drilling under way. Unlike most traditional banks and mezzanine lenders, Harwood will lend on exploration. For more on this, see the October issue of Oil and Gas Investor. For a subscription, call 713-260-6441.