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This paper deals with bank financing of oil and gas properties. It concerns, principally, the conventional production loan which is a loan to an individual, partnership, or corporation that is secured by interests in oil- and (or) gas-producing properties; this loan will be liquidated out of the income from the properties. The ramifications of this type of loan from the standpoint of both the banker and oil man are reviewed. A method of determining the loan value of oil and (or) gas properties is presented as well as the information needed to negotiate an oil loan.
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