A loan agreement is typically used by a bank, another financial investor or partner to finance all or part of an oil and gas project. Compensation for funds advanced is limited to a specified interest rate. The tender does not participate in profits earned by the project above the agreed upon interest rate. There is normally a fixed repayment schedule for the amount advanced and repayment of the obligation is made before any return to equity investors. Risk is limited to default of the borrower or failure of the project and thus the lender does his utmost to ensure that every aspect of the project is economically sound before agreeing to lend the money requested. Variations in production, market prices and sales do not normally affect compensation. Reserves are not recognized under this type of agreement