- 3e Royalties is a company providing superior returns to investors by purchasing $50 to $100 million royalties on existing producing fields, and by providing financing to oil and gas development well projects primarily in emerging markets.
- $100 million will be jointly raised with other companies such as Caledonia Global Royalties company and used to purchase Gross Over-riding Royalties (GORs) on 5 to 10 existing producing fields.
- This will minimize geological risk and project execution risk.
- Cash on cash returns of up to 20% are expected based on oil at $60/bl
- Production from long life reserves will be targeted, as will fields with further upside potential.
- Geographical diversification over 10 or more countries, will reduce political risk.
- 3e Royalties will be financial partners only and not be involved in the operations of the fields.
- 3e Royalties will not be required to commit any additional funds for future expansions or cost over-runs (we write one cheque only once).
- The royalties payable to 3e Royalties will be a top line call on the operating companies revenue stream and will not depend upon the profitability of the project.
- The cash flow to 3e Royalties from our GOR will rank ahead of the banks.
- 3e Royalties will exit their investments in 3 to 5 years after payout, and depending upon the commodity price cycle.
- 3e Royalties is a geoscience based company, with 5 of the 9 members of the "corporate team" having technical background and with mostly international experience.
- In addition 3e Royalties has a technical support agreement with Sproule International one of the worlds top reservoir engineering companies with a staff in excess of 75 geologists, geophysicists and reservoir engineers.
- Emerging markets have an order of magnitude mismatch between geological potential and drilling activity, which offers exceptional opportunity.
- Emerging markets have a financing deficit that also allows an opportunity for superior econometrics.
- Governance: 3e Royalties will apply the latest World Bank Group CSR standards recommended for extractive industries.
- Timing: 3e Royalties has immediate investment opportunities (e.g. Vietnam GOR on gas production from Exxon-Mobil) and expects to be fully invested in 12 to 18 months.
- 3e Royalties is an unique sectorally focused royalty based petroleum company structured to take advantage of several overlapping niche opportunities, that offers superior long term returns in emerging markets.