iCrowd Newswire - May 19, 2020
Oil Shock Presents Profound Buying Opportunity
Houston-based investment banking and advisory firm Entoro Capital, LLC (Entoro) and Denver-based LandGate, a marketplace leader in monetizing assets related to land ownership, have formed an alliance to expand the marketplace to facilitate the successful sale of oil and gas mineral rights.
With the current oil shock, today’s entry point for buying oil and gas minerals is perhaps generational in nature. Within the industry, there is high confidence that oil prices and subsequent drilling will recover with time. As liquidity has dried up, prices for minerals that just a few years ago sold for over $100,000 per acre, have dropped precipitously. Other positives for buyers today include the facts that traditional institutional oil and gas minerals buyers have largely gone to the sidelines and E&P companies are releasing some of these prized assets into the marketplace to raise short term cash.
Owning oil and gas minerals in perpetuity offers a tremendous opportunity for recurring cash flow and exposure to profit in multiple ways, including lease bonuses and royalty free oil and gas production. Over the last several years, this low maintenance, low liability asset class was the sole shining star within oil and gas public markets with several IPOs completed that satisfied investors’ hunger for yield. This striking success for oil and gas minerals stand in stark contrast to the strike by institutional and public investors against the E&P sector.
Historically this asset class, a globally unique one by virtue of private land ownership in the United States, was limited to only a few astute investors who invested large sums in back office teams, boots on the ground in courthouses, and expert knowledge in getting ahead of the drillers. Today this has changed as the IoT brings robust data, evaluation tools and transaction capability all online.
To be successful, it is critical that new investors work with experienced professionals. According to Craig Kaiser, President and Co-Founder of LandGate, “We have the track record, team, tools and technology – the 4T’s superfecta so to speak – to be the country’s largest marketplace for oil and gas mineral transactions. Currently, we have over 400 unique buying opportunities that span all U.S. oil and gas plays and are expanding daily. Even in this volatile market, we are closing transactions – that speaks volumes to the value of mineral ownership. We are excited to join forces with Entoro to take advantage of Entoro’s global reach to high net worth and family office investors who heretofore may not have been exposed to the financial benefits of oil and gas mineral ownership”.
According to Brian Lidsky, Managing Director of Entoro, “There has been no greater opportunity or time to buy into this asset class than what exists today. By aligning with LandGate we are excited to expand this prized asset class to our global accredited investor base that is hungry for yield backed by valuable collateral. These opportunities are available via our proprietary OfferBoard platform that allows for automated investment transaction services online – a particularly valuable platform given today’s global events. LandGate is a leader in the land rights marketplace and has exceptional talent, data and evaluation tools to make profitable investments”.
Entoro provides advice and services to a wide range of established and growth-oriented businesses around the world. We offer deep sector expertise across a full range of services in investment banking, equities and fixed income in the Americas, Europe, South America, the Middle East, and Asia. We provide financial and strategic advisory services which include Capital Formation, M&A, A&D, leveraged finance, equity/equity-linked financing, restructuring and recapitalization solutions.
LandGate is a mineral and property rights marketplace providing clients with listings, appraisals, and economic evaluation tools. The company launched by digitizing the valuation and purchase-sale process of mineral properties. LandGate’s competitive advantage is built on proprietary algorithms and the automation of valuation data tasks combined with a personal and interpretive approach to geology and oil & gas production forecasting. The company has expanded on that success to offer listings, data, and valuation for all types of property rights. LandGate’s living database has more than 30 billion data points for properties that they offer for free through their online platform.