Production Lending LLC recently closed on a debt investment in a historic Texas oil field, said the Houston-based specialty finance capital provider catering to small oil and gas companies.
According to a July 29 release, a private oil and gas company backed by Chahta Equity Partners Ltd. received the $4.5 million bridge loan for deployment in the Raccoon Bend Field in Texas. Production Lending said it closed and funded the loan on July 24.
Raccoon Bend oil field, a salt dome located along the Brazos River in Austin and Waller counties, Texas, currently produces more than 800 barrels per day. The field has produced more than 113 million barrels of oil since its discovery in the late 1920’s by Humble Oil Co., which later became Exxon Mobil Corp.
The undisclosed private company will use the loan to finance an acquisition of nonoperated interest in the Raccoon Bend Field plus drilling and completion capex.
Production Lending said it structured the investment as a short-term bridge loan on Chahta’s request to provide flexibility to refinance with conventional bank debt at any time.
Chahta Equity Partners is owned by Ryan Messer and Randall Eddington, who also own and operate Blackrock Midstream, a midstream marketing and blending business that caters to smaller producers seeking custom midstream solutions.
Commenting on the transaction with Production Lending, Messer said: “Production Lending’s closing process was very quick, simple and transparent, and their team was very responsive. We are very excited about this transaction and look forward to our partnership with Production Lending.”
Production Lending is owned and run by two former energy bankers, Abhishek Kumar and Ryan Childs, who have underwritten financing transactions worth more than $60 billion over their careers. Their business specializes in providing growth and acquisition financing in the form of short-term bridge capital and longer tenor debt and preferred equity investments throughout the Lower 48.
Since August 2016, Production Lending has funded 16 different transactions for a total capital commitment of more than $35 million, according to the company press release.
In May, Production Lending said it closed a $7 million bridge loan with a private oil and gas company backed by Energy Founders Fund LP (EFF).
Editor's note: This story was updated at 12:28 p.m. CDT July 30, 2019.