A type of asset-based lending (ABL) commonly used in the oil and gas sector, reserve based loans are made against, and secured by, an oil and gas field or a portfolio of undeveloped or developed and producing oil and gas assets. The amount of the loan facility available to the borrower is based on the value of the borrower's oil and gas reserves, as adjusted from time to time. The loan facility is repaid using the proceeds from sales in the field or portfolio.

In calculating this amount or borrowing base, the parties consider several factors, including:

For more information on RBLs, see Practice Note, Reserve Based Loans: Issues and Considerations.

For information on ABL, see Practice Note, Asset-Based Lending: Overview.

For more information on the oil and gas loans, see Practice Note, What's Market: Credit Agreements in the Oil & Gas Industry.