Oil & Gas
Invest in a diversified SPV of institutional-quality drilling partnerships. These partnerships are drilling oil and/or gas wells on highly productive land that is often in partnership with a public major producer. Take advantage of the bonus depreciation to offset your income taxes for 2022 at both the federal and state level.
Potential benefits of including oil & gas partnerships in your portfolio:
- Oil and gas historically have low correlation to the stock market, which makes them a viable investment opportunity for those looking to diversify their portfolio.
- In addition to potentially double-digit returns, oil and gas may act as a hedge against inflation.
- The SPV invests in multiple partnerships from various drilling operators, which could help reduce concentration risk for investors relative to investing in a single partnership.
- The SPV democratizes the asset class by providing access and reducing barriers of investing in oil and gas drilling. With its lower minimums, the SPV allows retail investors to capitalize on the high energy prices in the market today.
- These partnerships will provide investors with income until the well has been depleted, which lasts 10-25 years on average
Deal Structure & Terms
The investment will be structured as a special purpose vehicle (SPV) that invests in drilling partnerships offered by institutional quality operators. The SPV will invest in one or more Regulation D offerings that each drill and operate multiple wells.
The objective is to provide investors with significant income from the partnerships by investing
in oil and gas partnerships that have land leases in areas known to have significant natural resources. The secondary objective is to ensure investors get the maximum tax deduction for their investment, which typically ranges from 80-90% of the amount invested.
Minimum Investment – $25,000
- No annual management fee
- 10% performance fee from the distributions of the investments
- $50,000 origination fee shared by all investors based on the percentage each investor represents of the total amount raised
- Partnership for US tax purposes
- K-1 for US taxpayers
The investment in the SPV is considered illiquid. The partnerships will produce income for a period that could exceed 20 years, and investors will not be able to sell their interests in a secondary market.