Tuesday, January 15, 2019

How Companies Can Participate In Oil and Gas Exploration

A new venture in oil and gas requires a huge amount of funding. Exploration of sustainable energy sources is one of the major reasons for this. Sustained and long term efforts are needed to get a profitable seam of oil or natural gas or other natural resources, and this might take years. In all those years, a lot of money would also need to be spent. That is why such initiatives usually need a dependable source of energy efficiency financing. Such financing could be obtained in several ways. Let us look at two of them.

When the financier is ready to take up partial or complete ownership of the exploration efforts, then it is referred to oil and gas equity. The ownership of the company gets fully or partially transferred to the entity that is putting in the investment. This entity is free to later sell or transfer its share in the company to other entities who are willing to pay the right market price for that equity. This kind of funding in lieu of ownership is different from debt financing which is just a loan provided which needs to be paid back on time.


Another way for an entity to participate in oil and gas exploration efforts is to take over another company that is already involved in such activities. It can also get merged into such company. These steps are referred to as oil mergers and acquisitions. Whether a company would enter into a merger or an acquisition would usually depend on the relative size of the two companies.

When a company is looking to either procure or provide capital for such kind of activities, then there are many things to be checked and assessed. The first is the viability of the oil and gas exploration efforts. The second is the financial strength of the company whose equity is being purchased or which is being completely acquired.

All these assessment activities can be done very well by companies like Kapok Capital. They would not only provide this kind of consulting services, but they would also provide funding for renewable energy project. They have had a lot of experience for more than a decade in such projects. The list of projects is quite long in which they have arranged for either debt or equity financing. If capital is not required, they would be able to take care of the regulatory compliance of mergers and acquisitions or do the assessment of the viability of the project.

Read Also:-

No comments:

Post a Comment

Use Of Renewable Sources Of Energy

Renewable sources of energy are the ones that do not exhaust or have the ability to renew themselves. They are the gifts of nature and have ...