The Solvenz Group announced the launch of Solvenz Energy & Petroleum (Solvenz E&P), asset-backed lending platform operating in the U.S. and Canada. Solvenz E&P, through its bankruptcy remote special purpose series of companies will provide non-recourse financing and are underwriting collateral in the form of Proved Developed Producing (PDP), Proved Developed Non-Producing (PDNP), and Proved Undeveloped Producing (PUD) oil and natural gas reserves.

Solvenz E&P will identify, underwrite and issue senior debt against PDP, PDNP, and PUD reserves with intent on creating large diversified pools of rated asset-backed loans. Technological advances and rigorous analytical studies have markedly reduced historical uncertainties associated with the quantification and production of proved oil and natural gas reserves in the U.S. and Canada. Solvenz E&P has addressed certain key risks central to oil and natural gas exploration, development, and production, and has ascertained a degree of underwriting and pricing inefficiency within the bank, mezzanine and equity markets actively deploying capital into loan facilities intent on lending against proved reserves. Solvenz E&P has engineered solutions for inefficiencies it has identified, and has launched a lending platform yielding results that bring forward the realization of superior, risk-adjusted returns on its risk capital while simultaneously increasing the collateral value of proved reserves. As a result, Solvenz E&P is squarely positioned to offer financing solutions to operators, owners and those looking to either acquire or divest from PDP, PDNP, and PUD reserves. With its asset backed lending structure, Solvenz E&P’s exposure is limited to technical reserve and operator risk only. To achieve this, Solvenz E&P focuses on studies of underlying well data, well geographical locations, well concentration risk, continuity of historical production data and reserve reports for its underwriting protocols.

Richard D. McCrea, Managing Director, Asset Risk Analysis and Valuation of Solvenz E&P U.S. and Canadian territories, says, "This is a cooperative strategy to blend actuarial science with risks inherent in asset backed fixed income investing. Traditional capital markets (bank, mezzanine and equity) currently accessing this space are opportunistically choosing their position on the risk spectrum and offering pricing efficiency only in narrow ranges using collateral valuation and loan advance calculation methodologies that have remained static for the last 50-plus years. Our financing structure has the bandwidth to provide low cost debt financing that can be utilized for oil and gas asset acquisitions, refinancing existing debt, and funding for ongoing reserve development and exploration initiatives, while at the same time cutting a clear path for Solvenz to formulate risk mitigated solutions and secure collateral strategies engineered to provide stable growth for our investments."

Solvenz E&P and its SPV subsidiaries expect to issue senior debt in excess of $350 million for 2014, $700 million for 2015, and $1 billion-plus for 2016. Solvenz E&P, together with its producers, advisors and investment bankers, believe this is a conservative projection. Solvenz E&P is pursuing investment grade ratings on its pool of loans from rating agencies such as S&P, Moody’s and Fitch.

The U.S. Solvenz Group of companies in was formed in 2008 with initiatives of de-risking investments in alternative asset classes in domestic and foreign territories. The Solvenz Group of companies, along with its regulated investment funds in Luxembourg, are postured for strong growth and are continually expanding its reach into other esoteric asset classes.