M6 Energy Fund
We closed on our first portfolio of oil & gas assets in September (Purchase price: $30.5MM), and are under contract on another portfolio on which we’ll be closing in early January.
The Full Story
M6 Capital Group is pleased to introduce our latest Oil & Gas Fund, M6 Energy Fund, a 506c offering. This fund to fund offering is in partnership with Aspen Funds. By investing through M6 you will earn a 1% greater return than if you invested directly with Aspen Funds. The fund has been created to acquire diversified holdings of Non-Operating Working Interests & Overriding Royalty Interests of middle-market opportunities (focusing on PDP & PUD) partnering with larger operators in proven basins.
Our strategy is to purchase existing, producing assets (PDP) with additional upside through “infill” drilling in proven oil & natural gas reserves (PUD) partnering with established operators, including some of the largest operators in the country (ex. Marathon, Chesapeake, Devon, etc.).
Private equity funding in oil & gas has dropped precipitously in recent years creating a gap to fund new drilling. Because of this many large value investors (e.g. Warren Buffett) are investing into these assets. Current market pricing allows for solid acquisitions of existing production at good value, without having to “pay up” for the upside in drilling.
Second Asset Acquisition Under Contract
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Our second asset acquisition is currently under contract and is set to close in early January. This is a great bolt-on portfolio to the first acquisition. Purchase Price: $10MM
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The acquisition was off-market and held by an executive of the private equity firm that sold us the first asset. There are more producing wells and upside through new drilling as well.
Closing of the Fund
We are expecting to close the Fund to new capital very soon and will deploy the remaining capital throughout 2024.
If you’ve been considering jumping in this Fund or adding to your initial investment there is still a chance for you to!
The Bottom Line
If you have been intrigued by this opportunity, I want to encourage you to make a soft commitment, and secure your place in the Fund.
Overview
Key Reasons to Invest
Our sponsorship team and partners have extensive experience in operating and engineering on oil & gas assets for the last 40 years, with a 5-project track record.
Given target size of fund and lack of capital market activity, we’ll be able to participate in larger assets in proven basins with larger operators.
Our fund strategy will combine a focus on existing, producing assets at good values, with additional upside through drilling. We’re targeting a mix of distributions and reinvestment into new drilling to compound returns.
Numerous tax benefits for investors including Intangible Drilling Costs, Depletion & Depreciation. Optionality for investors to invest as a GP or LP.
Lower global inventories and minimal domestic investment in production, along with strong projected fossil fuel demand creates potentially favorable economic fundamentals.
Aspen Funds and Co-sponsor management teams will be investing personal funds in this Fund as limited partners creating an alignment of interests with our investors.
Highlights
Projected Net IRR: 25-30%
Equity Multiple: 4.0-7.0x
Leverage Ratio: 25-30%
Price Hedging: Partial to cover debt service
Active Tax Losses: Yes
Opportunity is for accredited investors only
Fund Structure
1-Year deployment period, may extend.
We will be accepting subscriptions on a first come, first serve basis.
First year of the Fund, expect to reinvest 100% of profits into new drilling programs to compound returns.
Will target distributions starting in Year 2 and thereafter growing over the life of the Fund.
Timeline
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General Public Announcement: October 1, 2023
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Last Day to Soft Commit: December 30, 2023
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Deadline to Wire Funds: January 30, 2024
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Closing on Portfolio First Asset: Complete
*A second allotment is in process for Q1 2024
Next Steps
Watch the Sponsor Fund Webinar with Ben Fraser at Aspen Funds
Soft Commit
Schedule a call with Erik Peddle
Additional Resources
Videos:
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Oil and Gas Masterclass: How to Evaluate Energy Investments
Podcasts:
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Breaking Down the Brewing Energy Crisis and Opportunities - Bob & Ben Fraser
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Oil & Gas Economics - What the future holds - Robin Winkle
Fund Structure - Key Items
1-Year capital raise & deployment period, may extend
We will be accepting subscriptions on a first come, first serve basis
Capital will be accepted as acquisitions are made and we will operate on a waitlist structure
First year of Fund, expect to reinvest 100% of profits into to new drilling programs to compound returns
Will target distributions starting in Year 2 and thereafter growing over the life of the Fund.
