Odessa, Texas (KMID/KPEJ) – Funding has been challenging for companies in the oil and gas industry as investors increasingly turn down smaller deals to focus primarily on large ones. Production lending LLC has stepped in to meet the needs of many oil and gas companies vying for funds to start up or continue their operations.

Production Lending LLC got its start after they saw a gap in a highly sought-after market. The company appeals to those in the industry that are normally in an intermediate stage where they are too big to continue raising equity but too small to receive funds from banks.

New regulations that recently came into play brought about new challenges for banks to provide oil and gas financing to smaller companies.

“The OCC regulations in 2016 are still having very big impacts today,” Ryan Childs, Principal of Production Lending LLC explained. “Some regional banks are able to get around those rules, but most of the larger banks are still bound by those restrictions which limit how much leverage they can provide and how much funding is available.”

Since it was founded, Production Lending LLC has closed more than 40 deals, but how they decide which ones to accept or pass on is a process in itself.

“Companies must have decent PDP, but not enough to be financed by the bank. They must also be looking to accelerate their drilling program and be willing to take advantage of the current high commodity prices. Companies looking to get to the next stage in their growth are ideal candidates.”

Production Lending LLC just recently closed its largest investment yet, a $35 million loan to a private Midland based company that will allow it to drill and complete six horizontal wells in the northern basin.