Types of Investment Programs

IEN can provide a variety of investment programs, depending upon the needs of the selected investor group.

Drilling Programs

Drillng Programs Drilling programs designed for low-risk and relatively predictable returns are available. Currently, our programs are focused on two main areas:

  • First, on the development of oil and gas reserves in the Barnett Shale region of North Texas, which has had more than 2,000 wells drilled over the past 10 years with extremely high success rates.
  • Secondly, on the development of oil and gas reserves from multiple zones in relatively shallow wells located in Oklahoma and Kansas. These kinds of programs are usually referred to as development programs, meaning that they are designed to further develop an already-producing reservoir or geologic formation.

We also have balanced-risk drilling programs that feature a mixture of low-risk projects mixed with moderate-risk ventures, which can be tailored to a group of investors’ risk profile requirements.

Miniral Land Syndicates

Historically, European investors have related well to real estate investment and understand it. A Mineral Land Syndicate, which is not at all a typical oil and gas venture, has many parallels or similarities with real estate investments.

First, the oil and gas business starts with the purchase of a mineral land lease just as a real estate venture often begins with the purchase of raw land. In both cases, of course, the important criteria is “location, location, location” – in the oil business this means proximity to subsurface minerals and in the real estate business it means proximity to traffic and markets. Second, in the oil business a well location is built, equipment installed and a drilling rig brought in, just as a real estate developer must bring in earth moving equipment and prepare a foundation and begin using cranes and other equipment to erect a building. Alternatively, a real estate operator may purchase a property that needs to be renovated, and perhaps expand the rental capacity. The oil and gas operator may similarly purchase a property where wells have already been drilled but are no longer performing economically and need to be reworked by engineers, and possibly there are additional locations on the property that may be developed.

As its primary activity, a Mineral Land Syndicate (“Syndicate”) will purchase mineral lands, sell them to oil and gas companies and participate in the revenues generated on any wells that are drilled on the leased land. In a typical case, a Syndicate will acquire mineral leases on behalf of oil and gas operators who wish to tie up a property months in advance of actually beginning to develop the property through drilling and need a financing mechanism to do so. The Syndicate will also acquire lands where the mineral lease has existing wells located on it that are either not producing or are producing at marginal rates and which need to be renovated. There may also be additional locations available on these lands for further development. Before selling the lease, a Syndicate may renovate any existing wells on the property to make them more productive in order to enhance the value of the mineral lands. 

IEN has direct experience of assembling such Mineral Land Syndicates. Based on highly conservative assumptions, we forecast that European investors can double their initial investment, over a five year period, after US tax! Given that such mineral land investments are very rarely available to Europeans, are genuinely a low risk entry point to gaining exposure to the oil industry and the oil price, are designed to exploit the current high levels of drilling activity within the US oil industry and given the very advantageous Euro to Dollar exchange rate, we believe this is a very attractive investment opportunity.

IEN is finalizing its current Mineral Land Syndicate offering for European investors, and this will become available from late April 2008 onwards. For European investment firms interested in learning more about this unusual investment activity, please contact Chris Tate at ctate@ieneurope.com.

Non-Drilling Programs

We have several programs that do not depend upon drilling for a return on capital invested. These include programs organized as follows:

  • To purchase existing producing properties with the potential to be upgraded.
  • Projects for reworking existing wells that are currently marginal.
  • Lease banks are a little known alternative to a drilling program, and usually available only to oil and gas insiders.
  • Equipment leasing programs.

The Next Step

If you would like to receive further information as to how we can assist your organization in introducing to your clients an investment in high-quality oil and gas projects, please complete this form.