Structured Financing Techniques in Oil & Gas Project Finance: Future Flow Securitizations, Prepaids, Volumetric Production Payments, and Project Finance Collateralized Debt Obligations

ENERGY & ENVIRONMENTAL PROJECT FINANCE LAW & TAXATION: NEW INVESTMENT TECHNIQUES, A. S. Kramer & P. C. Fusaro, eds., Oxford University Press, Forthcoming

Posted: 16 Jul 2009

See all articles by Christopher L. Culp

Christopher L. Culp

Johns Hopkins University - Institute for Applied Economics, Global Health, and Study of Business Enterprise; Swiss Finance Institute; Compass Lexecon; Financial Economics Consulting, Inc.

J. Paul Forrester

Mayer Brown LLP

Date Written: July 3, 2009

Abstract

Structured financing techniques in oil-and-gas-related project finance have grown more popular over the past several decades. Securitization, in particular, has played an important role in project finance by increasing oil and gas sponsors’ access to affordable financing from the capital markets and helping banks refinance their project loan exposures. We review the economic benefits of using structured finance techniques in oil & gas project finance, and we explain and provide examples of several of the most common types: future-flow securitizations, prepaids and volumetric production payments, and project finance collateralized debt obligations. We conclude with a discussion of the impact of the credit crisis on these products and markets.

Suggested Citation

Culp, Christopher L. and Forrester, J. Paul, Structured Financing Techniques in Oil & Gas Project Finance: Future Flow Securitizations, Prepaids, Volumetric Production Payments, and Project Finance Collateralized Debt Obligations (July 3, 2009). ENERGY & ENVIRONMENTAL PROJECT FINANCE LAW & TAXATION: NEW INVESTMENT TECHNIQUES, A. S. Kramer & P. C. Fusaro, eds., Oxford University Press, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1429501

Christopher L. Culp (Contact Author)

Johns Hopkins University - Institute for Applied Economics, Global Health, and Study of Business Enterprise ( email )

3400 N. Charles Street
Baltimore, MD 21218
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Swiss Finance Institute ( email )

c/o University of Geneva
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Switzerland

Compass Lexecon ( email )

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Financial Economics Consulting, Inc. ( email )

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HOME PAGE: http://www.fin-econ.com

J. Paul Forrester

Mayer Brown LLP ( email )

1675 Broadway
New York, NY 10019
United States

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