Overview
Key Takeaways
- Aim to earn returns via a quarterly dividend
- Buying producing oil and gas assets at NPV* 10-25%
- 15% depletion tax benefit
- Targeted Rate of Return 10-12%
- Benefit from increase in commodity prices
Return Profile
The Income Fund target return profile is 10-15% unrisked and the discounted Rate of Return is 1x-2x. The project types could be conventional or unconventional assets that are already producing. The Fund will target a Net Present Value of 10-15% upon acquisition, thus an increase in oil or gas prices can yield a higher return, and vis versa lower prices will lower the return profile.
Strategy
We execute an income-oriented oil and gas private equity strategy on your behalf. There are 3 steps to our strategy.
Step 1: Acquire assets that generate predictable consistent cash flow
We invest primarily in assets that generate predictable returns from the moment we make the investment. Proper engineering evaluation is conducted, decline curves are modeled and reviewed, and Net Present Value if calculated using strip pricing. Our parent company is an operator and oversees these investments.
Step 2: Find ways to create operational efficiencies on the assets.
To maintain and reduce the decline on current production, managing and reducing operating expenses is critical. Our parent company has decades of experience operating oil and natural gas assets. Managing the OPEX allows for higher returns for investors.
Step 3: Realize tax advantaged returns over time from the sale of oil and gas
Investors in an income strategy can look forward to earning consistent distributions from the sale of oil and gas production. The IRS provides a 15% depletion allowance against production revenue to allow for the decline in oil and gas revenue in a well. This equates to an investor only paying taxes on $0.85 of every dollar earned.
Top Questions
You are investing in a limited partnership that purchases oil and gas assets throughout the United States that our team identifies, acquires, and manages on your behalf. However, you should expect it to grow and change over time as we acquire more projects, and others are sold or pay off.
You earn returns primarily in two ways: (A) via quarterly dividends and (B) via appreciation in the value of the shares of your investment. These returns ultimately come from the increase in commodity prices, oil and gas –, as well as potential appreciation in the property’s value. As a shareholder, you are entitled to your pro-rata portion of any returns. Actual results may vary and there can be no guarantee of enhanced returns due to investing on EnergyFunders or the use of EnergyFunders Advisors’ services.
Dividends are typically distributed in the middle of the month following the end of each quarter, e.g. mid-April for dividends earned during the first quarter. You may also receive additional periodic cash distributions as certain underlying properties are sold. The value of your shares is also typically re-calculated on a quarterly or semi-annual basis.
Oil and gas investments are inherently a long-term, illiquid investment. EnergyFunders is intended for investors who have a minimum time horizon of approximately five year and your expectations are to receive your investment plus your return through the production and sales of oil and gas.
EnergyFunders i.e the General Partner (GP) earns a 2% Net Profit Interest (NPI) from each distribution to investors in the Partnership and depending on the project a 15-20% NPI once the investor has been paid out and achieved the stated Internal Rate of Return (IRR).
Investors receive a K1 from the Partnership for each Fund invested in or before March of the following year. The K1’s are easily downloaded from the Investors back office.
Is this plan a good fit?
Answer a few questions and we’ll suggest a plan for you.
Get StartedPopularity
Investors by age
45-65
Avg. Investment
$12,500