Volumetric production payment

A volumetric production payment (VPP) deal is a means of financing that has been used in the oil and gas industry for several decades.[1] A VPP involves the owner of an oil and gas property selling a percentage of their production in exchange for an upfront cash payment.[2] Typically, smaller exploration and production companies are seen utilizing VPP agreements as it allows them to raise capital while retaining full ownership of their property and not diluting their company’s equity position.[3]

  1. ^ "What Does Volumetric Production Payment - VPP Mean?". investopedia.com. April 2008.
  2. ^ Speer, Pete (March 2006). "Volumetric Production Payments - Analytical Implications and Adjustments for E&P Companies". SSRN 975271. {{cite journal}}: Cite journal requires |journal= (help)
  3. ^ "Volumetric Production Payment Contracts". onlinecarbonfinance.com. June 2009.