Munich Re closes $200m oil & gas securitisation financing

Munich Re Reserve Risk Financing (MRRF), a wholly-owned subsidiary of Munich Re, has closed a $200 million securitised financing with Diversified Gas & Oil (DGOC’s), a US-based owner and operator of natural gas, natural gas liquids, oil wells, and midstream assets.

In addition to funding 100 percent of this transaction, Munich Re also provided the necessary commodity price hedges.

The transaction is DGOC’s inaugural securitised financing and the notes have been assigned a BBB- investment grade rating by both Fitch and Morningstar.

George Carrick, president of MRRF, said: “A financing of this type requires a combination of operator capability and quality long-lived reserves. DGOC, an efficient consolidator and operator of long-lived producing natural gas reserves, was uniquely positioned to avail itself of this structure. We are pleased to partner with such an innovative company and provide a creative capital and hedge solution. We look forward to supporting DGOC’s continued growth.”

Rusty Hutson Jr, CEO of DGOC, said, “Our new securitised financing structure provides DGOC with access to a high-quality capital base and allows the company to diversify and enhance the duration of our debt capital structure while simultaneously enhancing liquidity. MRRF’s flexibility, unique approach to upstream financing, and combination of funding and hedging capabilities all proved instrumental in successfully executing this transaction.”

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