By: Waylan R. Johnson
Spicewood Energy Management, LLC
It has become the standard for many modern day investors to calculate their next investment move on a simple market watch or per the advice of their favorite analyst, telling them what, when and how to invest. Even though these investors are calling the final shot on voicing their “buy” or “sell” demands, they are still taking a back-seat approach of allowing others to direct their investments. Recently, due to falling oil prices and what I would call “not so savvy” industry analysts, investors are beginning to shy away from oil and gas investments instead of capitalizing on what true industry veterans are calling the next great “window of opportunity.”
There is an old but wise saying you may have heard: You make money when you buy, not sell. It is this exact concept of buy low which is currently driving the industry veterans and savvy investors to position themselves in the forefront of the next oil surge.
With oil prices low, now is the time when premier industry deals are being circulated at lower costs, when producing properties are being levered, and when drilling and operations are being ran at a fraction of the cost. If an investor is able to align themselves with a company that provides the proper vehicle, positioned to take advantage of this current industry environment, it can ultimately allow for huge upside potential and an overall greater ROI.
Allow me to further explain. If you align yourself with a company that creates a vehicle where you, the investor, can actually participate on a ground floor level free of any promoted deal costs, then your ability to profit in this current environment absolutely soars. It is through this type of vehicle that you will switch from being just another outside oil investor who is manipulated by the volatile stock market and analyst recommendations, to a true oil and gas insider.
Ground-Floor Oil Investment Vehicle
Spicewood Energy Management, LLC (SEM) has created the exact investment vehicle described above. Through investments into SEM’s fund managed Limited Partnerships, investors are able to participate in the oil and gas industry at a ground-floor, insider level. With very low up-front fees, no promoted deal costs, no debts or highly levered assets, SEM’s managed funds provide the perfect vehicle for investors to capitalize on the current environment and ultimately position themselves in the forefront of the next price surge.
SEM’s current fund, Spicewood Energy Fund III, LP (SEFIII), has been structured to take advantage of every aspect of the current oil and gas marketplace. Whether it be in securing participation in drilling deals, leasing of acreage, building of pipelines, purchasing of minerals and oil reserves, or acting as a financier to industry leaders, SEF III has created a solid foundation that its investor-partners can rely on, even at $50/oil.
SEM strategically structures its funds so that the investor and his dollars are on the same side of the fence with the oil company and its management team, protected by more than adequate insurance, an LLC wrapper, a general partner status, and an LP structured fund. Once you are positioned as an insider, in this inner circle with SEM, our staff and their 250+ years of experience will work on your behalf to take full advantage of several areas that present huge upside potential in this current market.
Areas to Capitalize On
Producing oil and gas properties have been very challenging to purchase over the last 2-3 years with oil prices being so consistent. However, due to the recent downturn in oil prices opportunities to buy these properties from companies with too much leverage, limited cash in the bank and limited cash flow are beginning to present themselves. With SEM being positioned where it is this is the perfect opportunity to take full advantage of such situations.
Oilfield service companies will have no choice but to reduce their fees and the prices they charge due to the market downturn. This will create an even more favorable outcome for SEM as we will be able to capitalize on the reduced rates for any field work needing to be done, which will ultimately decrease our capital finding costs.
The acquisition of top notch drilling prospects will become more affordable as up-front G&G costs will be lowered by geologists and engineers that are more concerned about simply getting their deal drilled instead of making a certain amount of cash. The longer a prospective drilling location/deal sits on the shelf, the higher the probability of another company learning about the area potential and ultimately recovering the reserves. Due to SEM’s current and favorable financial state, it will be able to move quickly on these premier deals and again take advantage of the lowered rates, again decreasing the overall capital finding costs.
Overall, finding oil reserves in the ground while drilling cost and services are cheaper because of $70, $60 or even $50/oil places the investor in the driver’s seat. It is this economic downturn that ultimately allows your dollars to go farther and spread across a wider array of industry deals, which only further serves to expand your potential for a higher return.
SEM has perfectly positioned itself and its LP investor-partners to take total advantage of this current market. By allowing you, our investor-partner, to sit beside us, on the ground floor level of an oil and gas company, without hidden fees, promoted costs, or ties to the volatile stock market, we are providing you an opportunity to become an insider; An opportunity to buy low, sell high, and capitalize on the next oil surge.
Spicewood Energy Fund III, LP will be accepting verifiable accredited investors through 2015 and will be utilizing our entire investment budget to capitalize on the current commodity climate.
For further information regarding topics discussed in this article, please contact Spicewood Energy Management, LLC via their Investor Relations Department: (512) 610-0552
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Disclaimer: Information herein is not intended to be any form of solicitation.
Information found on this page and throughout this entire website is neither an offer to buy or sell securities or other investments.
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