The Customer
The company provides contract drilling services to energy companies primarily in the Permian Basin in Texas and in the Oklahoma oil fields. The customer provides drill rigs on contract complete with labor, servicing and power based on a daily rate for the contract.
The Challenge
- As oil industry conditions swiftly changed, bank support faded while the company was anticipating the 10-month delivery of mission-critical assets.
- With three-year “pay or play” contracts in place, ownership felt they had ample room to adapt to changing conditions, but bank pressures and new controls around their revolving credit line made access to capital in the immediate future challenging.
- Banks were requiring the operator to adjust their cost basis to match the market’s downturn which forced them to seek funding alternatives.
Done Deal.
- First National moved beyond issues that cripple most lenders and delivered over $14MM in financing for these mission-critical assets.
- The ultimate financing structure and requirements were complex, and the First National team worked through numerous challenges over several months to ultimately deliver the financing to the customer on the rig’s delivery date.
- The assets went to work and broke production records–revealing that the financial limitations placed by traditional lending were unwarranted.
- In times of volatility, they trusted First National–and we got the deal done!
Business Cycle Volatility Case Studies
When economic winds or business cycles turn against your company and creative capital is needed to turn performance around, trust First National. Explore more case studies of companies facing these challenges by clicking below.
