Oil and Natural Gas

Energy for a sustainable future

The oil and gas industry in the United States remains a cornerstone of the energy sector, contributing significantly to domestic energy security, economic growth, and global competitiveness. Despite its critical role, the industry faces a rapidly evolving landscape driven by fluctuating market prices, increasing regulatory pressures, and a global shift toward cleaner energy sources. Advances in drilling technologies, such as hydraulic fracturing and horizontal drilling, have enabled the U.S. to become a leader in production, yet these innovations come with high costs and environmental challenges. Additionally, smaller operators, particularly in rural areas, often struggle to access the capital needed to modernize infrastructure or transition to more sustainable practices, placing them at a disadvantage in a highly competitive market.

USDA loan guarantees reduce lender risk, enabling businesses to secure financing for critical investments such as infrastructure modernization, equipment upgrades, and the development of cleaner technologies. For instance, operators can use USDA loans to fund projects like methane capture systems, energy-efficient processing facilities, and renewable energy integrations, aligning with regulatory requirements and environmental goals. Additionally, the program supports the development of ancillary industries, such as transportation and storage, which are essential to the oil and gas supply chain.

Highlights

  • Typically 100% of new project costs, including land, hand & soft costs, and working capital are eligible

  • One loan to cover construction through to permanent financing, with up to 24 month interest only

  • No restrictive covenants, no call provisions, no balloon payments, long-term amortizations

  • Acquisitions of existing facilities are eligible uses

  • Eligible for B&I ($25M per applicant) and REAP ($25M per applicant) if integrated with renewable energy systems

USDA Loan Guarantees uses for the oil & natural gas industry

Infrastructure Development and Modernization

  • Pipeline Construction and Maintenance: Financing for building or upgrading pipelines to improve transportation and distribution efficiency.

  • Processing Facilities: Developing or modernizing facilities for refining, natural gas processing, or liquefaction to meet demand and regulatory standards.

  • Storage Solutions: Building or enhancing storage facilities for crude oil, natural gas, and refined products.

Equipment and Technology Investment

  • Drilling Equipment: Acquiring advanced drilling technologies, such as hydraulic fracturing and horizontal drilling equipment, to enhance production capabilities.

  • Environmental Monitoring Systems: Investing in technologies to monitor and minimize emissions, spills, and other environmental impacts.

Sustainability and Emission Reduction Projects

  • Methane Capture Systems: Financing technologies to capture and utilize methane emissions, reducing greenhouse gas output and increasing efficiency.

  • Renewable Energy Integration: Supporting the use of renewable energy sources, such as solar or wind, to power oil and gas operations.

  • Waste Management Solutions: Implementing systems for managing and recycling water or waste generated during drilling and processing.

Working Capital and Debt Refinancing

  • Operational Costs: Providing working capital to manage day-to-day expenses, such as payroll, utilities, and maintenance.

  • Debt Refinancing: Consolidating or refinancing high-interest debt to improve financial stability and free up resources for investment.

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