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Solutions for the oil and gas industry

About Munich Re

Munich Re is one of the world’s leading providers of reinsurance, primary insurance and insurance-related risk solutions. The corporate group consists of the reinsurance and ERGO business segments, together with the capital investment company, MEAG. The Group operates in all lines of insurance. Ever since it was founded in 1880, Munich Re has been known for its unrivalled risk-related expertise and its particularly sound financial position. It also offers its clients financial protection when faced with extraordinarily high levels of damage – from the 1906 earthquake in San Francisco right through to the series of Atlantic hurricanes that occurred in 2017. Munich Re possesses outstanding innovative strength, which enables it to also provide cover for extraordinary risks such as rocket launches, renewable energies, cyber attacks or pandemics. The company is playing a key role in driving forward the digital transformation within its industry and in doing so is increasing its ability to assess risks and expanding upon the range of services that it offers. Its tailor-made solutions and close proximity to its clients make Munich Re one of the world’s most sought-after risk partners for the economy, institutions and private individuals.

Alternative debt financing for upstream oil and gas

Munich Re Reserve Risk Financing, Inc.

We are a Houston, Texas based, wholly-owned subsidiary of Munich Re, a AA- rated global insurance company operating across all risk lines.

Munich Re Reserve Risk Financing, Inc. ("MRRF") provides a unitranche alternative to combinations of bank RBL and junior/mezzanine debt that is:

non-dilutive;
fixed-rate; with
no borrowing base redeterminations.

We target established middle market upstream operators seeking to:

accelerate production growth through conversion of PNP/PUD reserves;
increase reserves/production through strategic asset acquisitions; and/or
rationalize capital structures.

To comply with and support the Paris climate agreement, Munich Re is targeting net-zero carbon emissions from risks with the upstream oil & gas industry by 2050.

Within the pathway to reach this goal, Munich Re will continue to support clients in the upstream oil & gas sector with solutions that enable our clients to achieve their own ESG goals, e.g., by realizing carbon capture and sequestration projects that contribute to mitigating climate change.

Our Offering

Non-dilutive, fixed-rate, senior secured, fully amortizing term loans
Loan sizes from $75 to $250 million
Loan tenors up to 7 years
OID of 1.0% to 2.0%

Key Advantages

Fixed-price, fully-amortizing structure eliminates refinancing risk
Total cost embedded in up-front fees plus fixed coupon – no equity “kickers”
Recourse limited to subject properties and specific contractual undertakings of sponsor
Munich Re credit enhancement supports term hedging of commodity prices at advantaged rates

Requirements

Subject properties located in North America
Subject properties can include up to 50% PNP/PUD reserves provided that:
- Acceptable plan of development agreed as precondition to funding
- Capital sufficient to fund the plan is available and earmarked
- Development costs capped via turnkey with sponsor or acceptable third parties
Subject properties to be “ring-fenced” via sponsor-owned SPV as borrower or VPP/Prepay/other acceptable form of conveyance relating specifically to the subject properties
Experienced management with track record of creating value in target asset area/basin
Hedging of associated commodity price risk