Practical Law Glossary Item 7-583-2606 (Approx. 3 pages)
Reserve Based Lending (RBL)
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:
The level of reserves, including the amount that is proved or unproved, as assessed by independent experts.