How did the fund started?
After years of working on individual prospects focused on the Permian Basin, and through that process creating a large inventory of prospects, Eagle Production Inc (EPI) has reached the critical mass of “going public”. The fund is a way to take EPIs expertise and experience to the next level of oil and gas production and to add value for all our investors. This process has also been aided by recent technological advances in reservoir research, plus drilling and completion technology, including fracking.
What is your investment process?
First, EPI is currently high-grading prospects, adding to prospects based on economic and geological analysis, and drilling wells with existing partners. With the fund, the process is that EPI is making these investment opportunities available to a wider range of investors looking for alternative low risk high return options. The fund structure provides security and transparency, with a proven methodology, and clear exit strategy.
What is your investment universe?
The fund will work with accredited investors only, but that said, all investors looking for low risk, high return alternative investments would be suitable.
What is the business strategy of the group for the coming months?
This is clearly defined in the fund documents. In the coming months EPI will begin to lease up the priority high-graded prospects in inventory, then begin a systematic drilling program that is scheduled to produce 250 BOD (Barrils of oil per day) within 12 months.
Do you plan to launch new products, what type?
The current EPI Fund is $120 million in four closings. Once this is complete, yes, we will be launching similar additional products.
What is your management philosophy?
EPI focuses on a developmental drilling program, meaning working in proven areas where our geological expertise and experience produces a high success rate in terms of drilling commercially successful oil and gas wells. We believe in good science, careful evaluation, building high-graded prospects to add to our inventory, then developing those to critical mass of at least 1,000 BOPD production, and divesting within year 4.
How is structured the investment team? How many professionals do you have and how decisions are taken?
A combination of geologists, engineers, financial analysis, and comprehensive economic modeling allows us to decide on the best approaches, structures and deal selection.
What is the fund's assets?
Oil and gas lease holds and producing properties. The current fund has a maximum of $120 million.
What risk management systems do you used?
All projects must meet internal risk management criteria, which is part of the 80% success rate of developmental drilling. Any prospect not capable of meeting this model is not considered. We also have a 4 to 1 ROI guideline and minimum pay-out in 24 months or less.
In what kind of environment the strategy performs better?
In the environment today in the Permian Basin. This is the optimum time and conditions are improving as the technology continues to improve. We like our economics in the $70-$100 per barrel range. (Currently above market expectations at $95.96)
Does the fund have a capacity limit? $120 million
How was the performance so far? Expectations? Profitability for the next 12 months? Fund is just starting, but based on our past experience, we expect to reach at least 250 BOD in 12 months, which is about $500,000 per month. ROI 62%-83% per year with an annual growth rate of 42%