Oil, Gas & Energy

Oilfield operations do not choose when to run. A pump jack cycles day and night. A wellhead compressor runs whether the grid is up or not. A SCADA system monitoring a pipeline segment cannot tolerate an unplanned power interruption without triggering a full shutdown sequence that costs more to recover from than the outage itself. In basins from the Permian to the Bakken to the DJ Basin, produced-gas or diesel prime-power generation is not a backup option. It is the primary grid for the production pad.

We finance prime-power generators and continuous-duty sets for upstream oil and gas production, midstream pipeline and compression, downstream refining utilities, and oilfield service companies that need dependable power whether a basin is booming or cycling down. The generator types that show up in this industry most often are natural-gas-fueled sets burning produced or pipeline gas, diesel sets where gas supply is not reliable, and bi-fuel configurations that allow a switch between gas and diesel depending on field conditions and commodity economics.

ERCOT volatility events in Texas, particularly February 2021 and subsequent cold-weather periods, drove an acceleration in independent backup power investment across the Permian Basin and the Eagle Ford. Operators who experienced production shutdowns during grid stress events moved quickly to install dedicated on-site generation to isolate their production from grid events. We financed a substantial volume of those projects and continue to see the same pattern when grid reliability events create urgency. The capital moves fast when the outage memory is fresh.

Generator Types for Oil and Gas Applications

Produced-gas generators are common in basins where associated gas from crude production would otherwise be flared. Operators use that gas to power the production pad directly, which reduces or eliminates diesel fuel costs and addresses regulatory pressure around flaring. Caterpillar G3500 and G3600 series gas sets, along with Cummins QSK series in gas configurations, are frequently specified for this application. We finance Caterpillar generator packages and comparable equipment across the major manufacturers.

Remote pipeline compression stations and gas gathering systems need reliable power that cannot depend on a utility grid that may not reach the station location at all. In many pipeline corridors, the generator is the only power source, running 24 hours a day, 365 days a year. Continuous-duty ratings, not standby ratings, apply here, and the financing reflects the higher asset value that comes with proper continuous-duty sizing and construction.

Oilfield service companies running well completion equipment, pressure pumping, and coiled tubing units on locations often need temporary generation during the completion phase of a well, particularly when the permanent utility or gas infrastructure for the pad has not yet been installed. Towable diesel sets and skid-mounted prime-power units in the 100kW to 1MW range serve this application. We finance both the long-term pad generators and the portable sets that service companies keep in their equipment inventory.

For operators in the Midland Basin, the Midland, TX area represents one of the highest densities of oil-and-gas generator requirements in the country. The Permian Basin's continued drilling and production activity keeps demand for oilfield generators steady even through commodity price cycles.

How We Underwrite Oilfield Generator Deals

Oil and gas revenue is cyclical. The P&L for a production company or oilfield service firm can look dramatically different depending on where commodity prices were in the most recent fiscal year. We do not evaluate oilfield companies on a single-year snapshot. The basin they operate in, the quality of their lease position or service contract portfolio, and the age and condition of the equipment they are replacing or adding all inform the deal structure.

For deals under $400k, application-only terms apply. Three months of bank statements showing operating activity is the core document requirement. Above $400k, we review the financial package but move faster than a traditional bank because we are not re-educating a credit committee on what a frac spread is or why a produced-gas generator earns at a fraction of the cost of diesel on a Permian Basin pad.

We work with B and C credit situations in the oilfield sector. A company that went through a commodity-price downturn, restructured debt, and came out the other side with a solid current production profile is fundable. The credit history matters less than the current operational picture when the asset being financed is a generator that runs revenue-producing equipment. We look at the whole context, not just the score.

Sale-leaseback on existing generator sets is useful for oilfield operators who own equipment outright and need to free capital for lease acquisitions, drilling costs, or working capital during a commodity-price pullback. The iron stays on the pad. The cash comes back to the operator.

Related Equipment and Cross-Industry Financing

Oilfield generator projects often include paralleling switchgear when multiple sets share a common bus to power a production pad or a gas processing plant. We finance the switchgear package with the sets in a single deal rather than separating the core equipment from the infrastructure that makes it functional.

Contractors serving the oil and gas sector on construction and facility upgrade projects often need temporary generation for drilling pad grading, pipeline installation, and facility construction in areas with no utility service. The construction and contractor generator financing program covers those temporary and mobile applications, and many oilfield service companies span both the construction and the production service categories.