You must log in to edit PetroWiki. Help with editing
Content of PetroWiki is intended for personal use only and to supplement, not replace, engineering judgment. SPE disclaims any and all liability for your use of such content. More information
Message: PetroWiki content is moving to OnePetro! Please note that all projects need to be complete by November 1, 2024, to ensure a smooth transition. Online editing will be turned off on this date.
Glossary:Loan agreement
A loan agreement is typically used by a bank, other financial investor, or partner to finance all or part of an oil and gas project. Compensation for funds advanced is limited to a specified interest rate. The lender does not participate in profits earned by the project above this interest rate. There is normally a fixed repayment schedule for the amount advanced, and repayment of the obligation is made before any return to equity investors. Risk is limited to default of the borrower or failure of the project. Variations in production, market prices, and sales do not normally affect compensation. Reserves are not recognized under this type of agreement. (SPE)