Insights

Acquisitions & Divestitures, Land Management, Due Diligence, reserve based lending

For independent oil and gas companies looking to finance their operations, one lending option is reserve-based lending (RBL), in which the loan amount depends on the value of their oil and gas reserves. Unlike other underwriting processes, the company’s cash flow is not what determines the amount that is available to borrow. Instead, the value of the reserves—referred to as the “borrowing base”—is what decides the loan amount. The lender will re-evaluate the reserve value (the borrowing base) on a regular basis, typically twice a year, to ensure that the loan amount does not exceed the value of the asset.

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Land Management

Over the last few years, industry fluctuations have accelerated a major shift in the way many companies manage their land functions. The days of mega in-house land departments have given way to a leaner approach to land management. Energy companies of all sizes are weighing financial considerations, market uncertainty, and staffing challenges as they re-imagine how they get business done. 

We have been an outsourced land partner for large energy companies, small management teams and everything in between for decades. In this article, we will help you identify if land outsourcing is right for your company or team and what you should look for in a land partner. 

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Land Management

In the third edition of Cinco Energy’s webcast featuring the newly-announced Board of Advisors, President Camille Nichols sits down with Mike Hinze to further explore the value of land professionals and building a skilled team. 

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Land Management

In the second edition of Cinco Energy’s webcast featuring the newly-announced Board of Advisors, President Camille Nichols sits down with Julie Jenkins, CPL. The duo discuss qualities a management team should look for in a landman and how technology is impacting the industry. 

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Land Management

After announcing Cinco Energy’s newly-formed Board of Advisors’ introduction, the team is excited to launch a new webcast series featuring the individual members. In its first edition, Cinco Energy’s President Camille Nichols sits down with J. Kelley Burch, CPL, to discuss the unique value landmen provide to companies and how their deep, rooted experience impacts the practice of land.

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Land Management

The oil and gas industry continues to navigate the effects of the Russia-Saudi oil war and Covid-19. Throughout recent months, US oil prices continually hit new record lows, reaching numbers unseen since the Persian Gulf War. Consequently, US producers have scrambled to shield themselves from permanent damage during the downturn, with six significant players expected to shut some 300,000 barrels per day (bpd) of crude for May and June. For other producers, the process of shutting in wells to downsize risk is paramount. Below, we will dig deeper into what led to the current climate and three important lease provisions to review before shutting-in your wells.

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Land Management

Given the current oil and gas market, it’s understandable that many companies are choosing to outsource their land work. There are several reasons why an organization may opt for this avenue. From a lack of on-site resources, limited bandwidth, and scalability concerns, land management companies like Cinco Energy can plug into your existing company structure and provide a multitude of benefits when you’re stretched thin or looking for a partner. Here are the top advantages of outsourcing your land work.

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Land Management, Due Diligence

Reserve-based lending (RBL) is a type of asset-based lending used to finance the operations of independent oil and gas companies. Debt is issued as a factor of reserve value, which is known as the Borrowing Base. Loans are subject to redeterminations of the borrowing base, commonly twice a year.

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Land Management, Due Diligence

Cinco Energy Management Group, a leading oil & gas-focused land management firm, celebrates its 30th anniversary this year. In 1990, the current CEO and Founder Randy Nichols established the company as Cinco Land & Exploration Company. Building upon his early career as a company landman for independent E&Ps, Nichols started the company to provide superior quality land and title services to the oil and gas industry. The name “Cinco” was inspired by the five members of the Nichols family and the company’s first project in a Spanish-speaking area of South Texas.

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Insider, Land Management

We are back for part three of our glossary of oil and gas terms. In part one and part two we highlighted commonly used words in the industry such as "Affidavit of Production" and "Non-Participating Royalty". Continue reading  part three as we focus on key terms related to Reserve-Based Lending.

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