Operations
CAPITAL
Financing Your Project
- Investment strategies to provide funding at different levels of the capital structure tailored to the specific needs of our Partners.
- Investment Banking & Advisory – global corporate finance capabilities, leveraging off our specialist expertise to become a trusted adviser & partner for the long-term.
Technical
Maximizing the value of your project
Providing access to our technical expertise to Partners on Projects & Transactions to maximize the asset value:
- Technical & Operations
- Geoscience & Engineering
- Research & Analysis
- Legal, Compliance & Regulatory
- Financial, Audit & Administration
Trading
Realizing the value of your project
oProviding trading, hedging & risk management strategies to Partners on Projects & Transactions to realise the asset value:
- Hedging strategies
- Risk Management Solutions
- Crude & Product Marketing & Sales
- Wholesale Distribution
- Off-take & Swaps
Infrastructure
Storage, Processing & Delivering your product
- Production and Processing
- Gathering and Storage
- Project and Asset Management
- Project Execution
- Transport and Delivery
Overview
The Berry Energy Master Fund (?BEMF?) provides upstream producers with an alternate source of funding from debt or equity that is long-term, flexible, committed and aligned. We aim to provide our Producer Partners with a win/win funding source ? there is no interest and no dilution ? our repayment comes from the same source as your income ? production – and we share the same risks as you in price.
Increases in drilling and upstream production are required to meet demand. All upstream producers, from NOC?s, global giants to mid-small cap and private companies are looking for capital to fund drilling and production programs. Even with the recent increase in global oil prices, credit, capital and financial markets remain closed to all but a select few.
Gaining access to capital has become a difficult task for the upstream oil and gas industry ? banking regulations in the wake of the GFC and recent oil price volatility has made banks more cautious about lending. The trend towards loans with shorter maturities and more onerous terms has introduced a higher element of risk for energy projects, which are almost always long-term in nature.
Our funding agreements are bespoke and flexible, committed for the long-term, without onerous financing terms or any hedging requirements – our remunerations structure is fully aligned with the operations of the project where we share the risk of production and price.
A win/win proposition
Our agreements allow the upstream producer to access capital by leveraging proven reserves to fund production or expansion that is project specific, that is safer than debt and is cheaper than equity (non dilutive to current shareholders) and has no effect on their other projects. For the Producer:
- Access to capital for production or expansion
- Non-dilutive and non-controlling
- Depending on your circumstances it can be tax advantaged
- Flexible
- No interest – repayment of capital from production
- Project, not company, specific
- Reduce exposure to a project without debt or equity
- No requirement to hedge production
Who We Fund
- OPEC
- Other Government/NOC
- Major
- Independent
- Publicly Listed
- Private
What We Fund
- Expansionary works programs
- Increasing existing production
- Field rehab & workovers
- Merger & Acquitition
- Balance sheet repair & debt replacement
- Hedging replacement & de-risking projects
Where We Fund
- EMEA
- Americans
- Asia Pacific
Funding our Producer Partners
Increasing Current Production
Where an existing producing asset needs additional capital to increase production or an expansionary work program has been planned, our funding will provide long-term & aligned capital to be repaid through the resultant increased production.
Field Rehabilitation & EOR
Where a Project requires work-overs or EOR programs, our funding can provide the capital to commence the program which may not have otherwise commenced through internal competition for scarce financial; capacity.
Merger & Acquisition
For M&A of assets that are in production, our funding can provide long-term financing that will provide a higher IRR & not require the dilution of a capital raise or the onerous terms of debt.
Credit & Balance Sheet Repair
For in-production entities our funding can be used for balance sheet repair, replacement of high-priced, short-term or maturing straight & convertible debt. We can also consider replacing out of the money hedging programs that could be dragging on overall company performance as well as straight credit against proven reserves & production.
De-risking Projects
The trend towards loans with shorter maturities has introduced a higher element of risk for energy projects ? which are almost always long-term in nature.
Crude for Refined Swaps
For State oil companies & NOCs ? exchanging crude for refined products can significantly reduce fuel import bills and mitigate the outflow of precious hard currency reserves.
Upstream Producer Funding Comparison
EQUITY
DEBT
BERRY
Project specific ? no impact on other projects of the company
No dilution to equity investor base
Covenant light
Flexibility
No hedging requirements
Repayments made out of production
Management insulated from outside controls/influences
Lower financing costs
Shorter timetable for due diligence and funding
Potential tax advantages for an upstream producer
Not counted as debt against future borrowing capacity (IFRS/GAAP)
Creating Value for our Producer Partners
Our allocation provides flexibility for the oil and gas producer to leverage proven reserves to fund production or expansion, in a tax effective manner, while avoiding the many negative side effects associated with traditional equity and debt financing methods.
No dilution
- No dilution to existing shareholders ? protecting shareholders from the heavily dilutive effect of an equity financing;
- Project specific funding ? limits Berry benefiting from other successful projects the company may have now, or in the future;
- Allows management of the company to retain control over their business.
Unique financing
- Repayment only comes from production ? no interest;
- Non-debt financing ? no impact on company?s balance sheet or borrowing capacity;
- Covenant lite – complex, company wide covenants, hedging requirements, etc. not required;
- Flexibility ? a bespoke agreement that allows for a great deal of flexibility to be incorporated.
Short execution timetable
- Average deal takes 4 ? 6 weeks (not months), can take as little as 2 ? 3 weeks;
- Assessment takes advantage of publicly available information as well as in-house expertise.
Risk Management
- Our agreement can be used to de-risk projects without adding additional debt, raise equity, impact other projects or spend current cash reserves;
- Can be used to replace capital that was raised prior to production with onerous terms (especially Convertible Notes) ? taking back control of the company and assets,
- Non-debt financing ? attractive for companies to de-leverage balance sheets.
Returns
- Returns are calculated generally over a long life ? enhancing operator?s IRR;
- Benefit from money now whilst deferring tax due until delivery of production.
Please use this form to provide preliminary Project details below. Berry Commodities, its associates and subsidiaries, confirm all preliminary information provided will be subject to the strictest confidentiality and only used for the preliminary assessment of potential Project funding requirements. This form is for preliminary assessment only, contacting and completing this form and providing this information in no way constitutes approval for funding, nor does it constitute any form of commercial relationship between the Parties. Your enquiry will be processed promptly and all fields are required to be completed. Failure to complete any field will cause delays and/or rejection of your enquiry. In providing this information, you are acknowledging that Berry is relying on the accuracy of this information in its initial assessment and you warrant that it is true to the best of your knowledge.