Orrick Advises Noteholders on Third Upstream Wellbore Oil & Gas Securitization Financing

April.14.2020

Orrick has advised the noteholders in the third rated securitization of oil and gas wellbore interests, this transaction being the second for Diversified Gas & Oil.  In November 2019, Orrick advised the noteholders on the first securitization by Diversified Gas & Oil of its operated oil and gas wellbore interests and in September 2019, the firm advised the noteholders on the first rated securitization of oil and gas on non-operated wellbore interests, issued by Raisa Energy.  The Raisa and the DGO transactions have established this distinct, new asset class for securitization transactions.  

“With the market down significantly, there is limited new money coming into oil and gas at a time when the industry needs capital to sustain itself. This innovative securitization structure bridges the gap by bringing capital from securitization investors that invest in steady revenue streams to oil and gas producing assets with prices fixed with long-term hedges,” said Jonathan Ayre, who co-led the Orrick team on the financing with Leah Sanzari.

“This securitization financing is the third to close since September, and it demonstrates that these types of creative transaction structures may be what the industry needs to navigate unprecedented market conditions. Noteholder interest in this new asset is growing and expanding with each transaction,” added Leah.

Orrick's Structured Finance and Oil & Gas teams collaborated on the matter with a team led by Leah and Jonathan and supported by Darrell ThomasThomas Mitchell, Steve Jackson, Rich Paladino and Alison Epperson, among others.