Oil Capital: The History of American Oil, Wildcatters, Independents and Their Bankers

by Bernard F Clark

Overview

Oil Capital: The History of American Oil, Wildcatters, Independents and Their Bankers

The history of oilmen and the energy bankers who loan them capital is inextricably bound together. Energy bankers have reacted, adjusted and evolved alongside the same business cycles, regulatory changes and commodity-price gyrations that have challenged the generations of oilmen they banked. In many respects, however, it is remarkable how little has changed during the past 100 years in the fundamentals of lending against collateral that has been hidden underground for millions of years. Nor has there been much change in the relationship between the early wildcatters willing to risk their--and their banker's--last dime and the bankers who cautiously evaluate the oilmen and their collateral.

Along with manpower, rigs and drill pipe, capital has always been a critical tool in the exploration for and development of oil and gas. From the earliest days of the industry, producers have required more start-up capital for acquisition, drilling and development of oil fields than can be generated out of cash flow from existing production. The accomplishments of oil companies were and are as dependent upon access to capital as access to the hydrocarbons they seek to exploit. This book tells the story of the enduring relationship of oil and gas producers and oil and gas bankers in the context of the evolution of the two industries.

Product Details

ISBN-13:	9780692817322
Publisher:	Bernard F. Clark, Jr.
Publication date:	06/01/2016
Edition description:	New Edition
Pages:	446
Sales rank:	920,354
Product dimensions:	6.00(w) x 9.00(h) x 0.99(d)

Table of Contents

INTRODUCTION i
Chapter 1: Private Ownership-The Foundation of the U.S. Oil And Gas Industry 1
History of Mineral Ownership [X]
Mineral Laws of England [X]
Mineral Ownership in the 13 Colonies [X]
Mineral Laws of Spain [X]
Mineral Law in Texas [X]
Private Oil and Gas Ownership in California [X]
Oil and Gas Law in Louisiana [X]
Oil and Gas Ownership in Alaska [X]
The American Legacy [X]

Chapter 2: The Early Years-1900s-1930s X
Early Capital Sources [X]
Independents' Relationship with Majors [X]
Spindletop - Idle Dreams and Insane Notions [X]
Without Rules; Capture and Waste [X]
East Texas: The Discovery that Changed the World [X]
Efforts in Reining in Overproduction [X]
The Texas Road to Proration [X]
The Rise of the Texas Railroad Commission [X]
Proration of Gas? [X]
The Legacy of East Texas [X]

Chapter 3: Energy Lending Following Proration X
Energy Lending Expands to Money-Center Banks [X]
Post-War Lending Through the 1950s [X]
ABCs of Production-Payment Lending [X]
Impact on Sales of Oil and Gas Properties [X]
Variations on a Theme [X]
Oil Payments Only-Not Natural Gas [X]
Closing the ABC Loophole [X]

Chapter 4: Elements of Energy Lending X
Valuing Collateral [X]
Early Loan Documentation [X]
The Bank's Lawyers [X]
Introduction of the Loan Agreement [X]
Financial Covenants [X]
The Promissory Note [X]
The Mortgage [X]
Assignment of Production [X]
Title Due Diligence [X]
Documentation at Closing [X]

Chapter 5: Lending Into The 1970s X
The New Standard-The Borrowing-Base Revolver [X]
Borrowing-Base Mechanics [X]
Borrowing-Base Determination [X]
Borrowing-Base Deficiency [X]
Bank Price Decks [X]
Impact on Other Loan Provisions [X]
The Role of the Internet [X]

Chapter 6: 1980s: The Decade of Destruction X
The Rise Of OPEC [X]
Changes in U.S. Bank Regulation and Environmental Laws [X]
Alternate Loan Structures [X]
Downfall of the Energy Lenders [X]
Penn Square: Canary in the Coal Mine [X]
Out of the Frying Pan, Into the Fire [X]
Legacy of Loss of Texas Banks [X]
Energy Lending Takes a Back Seat [X]
Creative Financings for Energy Projects [X]
Paradigm Shift: Nymex Hedges Producers' Price Risk [X]

Chapter 7: 1990s: Energy Banking Reinvented X
Bank Credit Markets Recover [X]
Rise of the Mezzanine Lenders [X]
The VPP: Entry of Utilities as Capital Providers [X]
Interaction Between Borrowing Base and Hedging [X]
Loan Syndications [X]
Bank Deregulation [X]
"We're From the Government and We're Here to Help" [X]

Chapter 8: The New Millennium X
The Oil and Gas Price Rush of the 2000s [X]
George Mitchell and the Shale Revolution [X]
Falling Oil and Gas Prices: The 2008-2009 Edition [X]
Kicking the Barrel Down the Road [X]
Dodd Frank and Banking Regulations [X]
2013: Buyer's Market at the Capital Bazaar [X]

Chapter 9: OPEC Delivers a Thanksgiving Turkey X
Bank Examiners [X]

Chapter 10: In Conclusion X

ACKNOWLEDGEMENTS X

BIBLIOGRAPHY X

INDEX X

Editorial Reviews

"Oil Capital is a well told and thoroughly researched history of the evolving relationship between American oil and gas producers and their lenders. Mr. Clark's legal training and 30 years of experience in petroleum finance give him a unique ability to crystallize this only-in-America story. This book is a must read and will remain an authoritative reference for serious students of oil and gas finance." -Owen L. Anderson, Professor and Distinguished Oil and Gas Scholar, The University of Texas School of Law, and Kuntz Chair Emeritus and Cross Research Professor Emeritus, The University of Oklahoma College of Law "Mr. Clark's book should be required reading for finance professionals in the energy business. He explains a century of evolution that allowed U.S. independents in the past decade to scale up tight oil and gas production and transform the global energy market." -Bill White, Senior Advisor, Lazard Ltd.; Former Mayor of Houston and U.S. Deputy Secretary of Energy "Mr. Clark's fast-paced, keenly interesting Oil Capital is the first book to tell the whole story of the intrepid wildcatters and the methodical bankers to whom they turn to satisfy their insatiable need for capital. It gets to the heart of one of the reasons why America continues to be among the largest suppliers of oil and gas in the world: energy finance. Told with a deep understanding of financial markets, corporate law and the oil business, Oil Capital belongs in the collection of anyone interested in American energy." -Chris Kulander, Ph.D., Director, Oil & Gas Law Institute, South Texas College of Law "Oil Capital is the definitive book on the history and evolution of financing the oil and gas industry by one of the foremost experts active in the business. This book should be required reading by anyone involved in the industry." -Tim Murray, Managing Director and Head of Energy Origination, Benefit Street Partners LLC

From the Publisher