Much of what we do at Redhawk Investment Group centers around educating people about, and helping them to invest in, advantageous oil and gas investments, which include drilling programs and the ownership of mineral rights. Both types of investment projects have their benefits. We believe in the long-term benefits of owning mineral rights. But, there are also benefits that come along with investing in a drilling and development program. Here’s a brief overview of some of the positive features of each option. Benefits of Investing in Mineral Rights Some of the most important incentives for you to have mineral rights in your financial portfolio include receiving an upfront cash bonus to sign a lease, plus receiving 20 to 25 percent of the gross revenues monthly from production, and not being financially responsible for dry holes or any operating costs -- and, rights never expire. With benefits like these, on top of the limited amount of risk, it’s no surprise that many accredited investors are choosing to go this route when expanding their financial horizons. Imagine: Successfully investing in mineral rights could make a difference in your life and finances, plus contribute to the financial well-being of family members for generations to come. Mineral rights can be gifted or passed on, creating a lasting financial legacy. Benefits of Investing in Drilling Operations Investing in drilling production and operations offers a whole separate set of benefits. Drilling operations afford the chance for aggressive investment returns on healthy wells, with monthly revenue for the lifetime of the well. Along with a monthly payout, this type of investment also gives the investor the right to tax deductions due to intangible drilling costs. In a broader outlook, this kind of investment doesn’t just affect the investor personally. It has a ripple effect that provides jobs to others, furthers energy independence, and leads to the exploration and development of other wells in top-producing fields. Finding the Right Fit Here at Redhawk, we believe that both mineral rights and drilling operations can be lucrative and lasting investments for the right types of accredited investors. We also believe in being knowledgeable and informed before putting your hard-earned money in any fund. Let us help you find the right path as you invest. Whether you’re investing for the first time or a seasoned investor, we can help you create wealth that lasts and lends itself to your portfolio goals. Interested? Please don’t hesitate to reach out to us and request more detailed information. The material herein does not constitute an offer to see nor is it a solicitation of an offer to purchase any security. Offers will only be made through a private placement memorandum to accredited investors and where permitted by law. Investments in security are not suitable for all investors who can withstand the loss of their investment. Investors should perform their own investigations before considering any investments and consult with their own legal and tax advisors. Past performance does not guarantee future results. This presentation is copyrighted material and only for the use by Redhawk Investment Group and its affiliates.
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Oil and gas investments, particularly direct participation investments such as those offered through Redhawk, provide investors with hard-to-beat opportunities for profit within an industry that is currently experiencing a resurgence in productivity and profitability. Enjoying the profit and other benefits available from oil and gas investments requires investors to make wise choices regarding the companies they invest through and the projects they invest in. What follows is a look at 5 of the most important factors to consider when choosing direct participation oil and gas investments. When choosing oil and gas investments, follow your own financial and risk preferences. Most all direct investments in oil and gas come with a certain level of risk as compared to investing in stocks. It is the potential reward, tax benefits, and other advantages that make higher level of risk worthwhile to the investors who choose this path. However, even within direct investments, there are varying levels of risk, and financial commitment, possible. For example, mineral investments typically have lower risks associated with them than oil and gas drilling investments due to the fact that mineral rights owners incur no operating expenses nor run the risk of dry holes. Other projects, such as oil well investment opportunities, may possess a slightly higher risk profile. Likewise, some projects require more money upfront from investors than others. Understanding your own financial and risk preferences, and choosing oil and gas investments that are in keeping with those preferences, is a wise first step in making these decisions. Doing so will allow you to enjoy the benefits of these investments within an environment in which you are financially and personally comfortable. Select oil and gas investments that provide reasonable profitability assessments. When you choose direct participation oil and gas investments, you may encounter some proposed projects that are being touted as remarkably profitable. For example, you may find a project that promises unrealistic yields within just a few years. When evaluating projects for potential investment, the best approach is to view these remarkable projections with a fair amount of skepticism. Instead, select oil and gas investments that come with reasonable assessments of the project’s profitability. This means that the company overseeing the project should be able to provide you with thorough evaluations of the project’s risks, anticipated profits, and timeline for the realization of these profits. In addition, you should see projections that are realistic, reasoned, and backed by data. If you are investing in a project currently underway, you should also be able to access the project’s past yields and productivity. Choosing these types of projects can help you to reduce your risk of investing in a project that fails to meet its projected yields, as well as give you insight into a company’s integrity and competence within the oil and gas investments field. Choose oil and gas investments in high producing areas. Before committing to specific oil and gas investments, consider the areas where the projects are taking place. For example, if you are taking advantage of oil well investment opportunities, look for ones that are in geographical areas that are most likely to yield producing wells. Does the geography make it probable that your investment will pay off? Be sure to exercise your due diligence. In particular, consider projects in up and coming areas such as Oklahoma SCOOP and STACK plays. And find out from the company with whom you are investing why they feel that this particular project has a high likelihood of succeeding. They should be able to provide you with information to support their reasoning that this project will meet expected yields. Selecting projects based in part on where they are taking place can reduce your risk of investing in a project that falls short of its predicted yields. In addition, doing so can allow you to find oil and gas investments that will not only produce expected yields but do so for the long term, maximizing the profitability you receive from your investment. Select a company for your oil and gas investments that has an established background. When selecting a company to invest through for your oil and gas investments, it is important to find a business that has a proven track record of success. For example, look at their last several similar projects and evaluate whether these projects met expectations, yielded producing wells, and delivered profitability to investors. New companies or those who have struggled to deliver high-performing investments in the past may not be the best companies to choose as you move forward with your oil and gas investments. Instead, reliable and proven companies offer a much more stable avenue through which to make your oil and gas investments. For example, Redhawk has implemented almost $170,000,000 worth of high-quality alternative investment projects since mid-2014, demonstrating an ability to identify and bring to fruition profitable oil and gas investments for participants. Consider the tax advantages available through oil and gas investments. Investing in oil and gas in the U.S. often comes with significant tax advantages (and other benefits) that require consideration when you are choosing your oil and gas investments. An oil well investment opportunity, for example, may initially seem to come with high capitalization requirements. However, tax benefits that allow you to deduct certain expenses can reduce the overall amount of money you end up investing, as well as reduce the amount of money you actually stand to lose if the investment does not perform as expected. By taking all of the potential advantages into account, and by consulting a financial professional regarding potential tax benefits, you can more confidently choose oil and gas investments that are right for your risk preference, financial comfort level, and profitability desires. Choosing oil and gas investments means considering all of the factors that go along with those investment opportunities. By following your financial and risk preferences, choosing investment opportunities that have reasonable profitability assessments, selecting investments in high producing areas, selecting a company with an established track record, and considering the tax advantages of each opportunity, you can select investments that should benefit you in the long run. The material herein does not constitute an offer to see nor is it a solicitation of an offer to purchase any security. Offers will only be made through a private placement memorandum to accredited investors and where permitted by law. Investments in security are not suitable for all investors who can withstand the loss of their investment. Investors should perform their own investigations before considering any investments and consult with their own legal and tax advisors. Past performance does not guarantee future results. This presentation is copyrighted material and only for the use by Redhawk Investment Group and its affiliates. Investors hear the term “accredited investor” bantered about often. Being a qualified or “accredited investor” can open doors to many higher yielding – though often higher-risk –investment vehicles. For the independent-minded investor who is not typically attracted to large institutional “plays” sponsored by Wall-Street-type firms, understanding what an accredited investor is and how to qualify to become one is an important first step toward building wealth. What is an Accredited Investor? It is estimated that about 8.25 percent of all American households qualify as accredited investors. That is over 10.1 million U.S. households. Further, these households account for over 70 percent of all private wealth in the country or about $45.5 trillion. The term “Accredited Investor” was created by the Securities Act of 1933 and was further defined by 1982 and 1988 changes in Regulation D Rules. These rules were originally conceived for the “protection of investors” and established three basic criteria for being considered accredited:
Why Become an Accredited Investor? As an accredited investor, you are among the top 8.25 percent of financially-qualified individuals in the U.S., which puts you in a fairly elite “club.” It is estimated that the U.S. is currently adding about 1,700 newly accredited individuals per day. By joining this club, you will have more opportunities to directly invest money into a variety of investment vehicles. How to Find Good Investments as an Accredited Investor? Since no formal institution determines accreditation of an investor, the trick becomes understanding the process of verifying your accredited investor status and how to find good investments as an accredited investor. Stepping out of traditional stocks, bonds and ETFs, the road can get a bit complex. Being elevated to a new financial plateau by becoming accredited also comes with its own set of issues. Do you seek out a hedge fund, a venture capital fund, or a private equity fund, only to find minimum investment amounts of $1 million or more that disqualify you quickly? We recommend visiting fund offerings like Redhawk and asking for more information about potential investment offerings. Our qualified staff can help you determine your next steps and provide expert advice and resources about investing. Options for Increasing Returns as an Accredited Investor The most common type of ownership sought by accredited -- but non-super-rich -- investors are equity interests in companies or investment funds. These could include startup companies, private real estate partnerships, oil and gas or mineral development partnerships, and many more. Accredited investors looking for better returns can also explore simple investment vehicles like a “private placement” platform. A private placement is a private capital raising event offered to a relatively small number of investors. It is different from a public offering in which securities are made available to the open market to accredited and non-accredited investors. They are subject to the Securities Act of 1933 and therefore are required to make certain disclosures, but they do not have to be registered with the SEC. Finally, oil and gas partnerships are always a viable option, as they are capital-intensive and offer good tax deductions and very favorable return capabilities. Do Your Due Diligence Often who you are dealing with is as important as where you are developing. The accredited investor will find venture capital opportunities, telecommunications companies, construction companies, shipping and aviation businesses, and the list goes on. Do your homework and exercise due diligence to protect your investment portfolio. We recommend that you consider taking the time when you're making the investment to go see the offices and meet the owners of the companies offering these opportunities. The less credible and “not-so-real” players may not want you to see their physical space or meet the staff that will be managing your investment. Making the Most of Your Investments It’s a brave new world out there. Take your time and think through your investment objectives. Make money. And as always, reach out to our team at Redhawk Investment Group if you have any questions about the process that we can help you with. Jack Nichols Managing Partner Redhawk Investment Group Dallas, Texas www.redhawkinvestmentgroup.com jnichols@redhawkinvestmentgroup.com Jack Nichols is a founder and Managing Partner of Redhawk Investment Group, a family-owned and operated energy company with offices in Dallas, Texas and Oklahoma City, Oklahoma. The company developed and uses an investor-friendly business model for use in the private placements of mineral rights aggregations and drilling and development projects.
The material herein does not constitute an offer to see nor is it a solicitation of an offer to purchase any security. Offers will only be made through a private placement memorandum to accredited investors and where permitted by law. Investments in security are not suitable for all investors who can withstand the loss of their investment. Investors should perform their own investigations before considering any investments and consult with their own legal and tax advisors. Past performance does not guarantee future results. This presentation is copyrighted material and only for the use by Redhawk Investment Group and its affiliates. In a recent blog post, we discussed what mineral rights are. To recap, mineral rights, also known as mineral interests, are a form of real property rights. Owning mineral rights gives an individual the right to exploit, mine or produce any or all of the minerals lying below the surface of the property -- in this instance, oil and gas. Once you own mineral rights, they never expire. Now that we’ve established what constitutes ownership of mineral rights, let’s explore how to make money from them. Owning oil and gas minerals is different than participating in a drilling and development program. Owning mineral rights tends to have a lower risk profile and can have higher rewards than investing in a drilling program for several reasons, such as not having to contribute to operating expenses, completion or dry-hole costs. The mineral rights owner receives an up-front lump sum lease signing bonus from the drilling company paid on a per-acre basis for the right to drill. In addition to the lease bonus paid to the mineral rights owner, there’s also the off-the-top monthly percentage (12.5 percent to 25 percent) of gross production check that is owed to the mineral rights owner, often referred to as “Green Mail.” At Redhawk, we typically produce cash flow for investors within six to 12 months of beginning mineral purchases. Based on fairly conservative assumptions, estimated return targets in one of our mineral programs could create a mid-range internal rate of return (IRR) of almost 26 percent and a very handsome ROI. To further demonstrate how the process of investing in mineral rights works and to showcase the potential for profit, let’s look at an example using the STACK play (Sooner Trend Anadarko Basin, Canadian and Kingfisher counties) in Oklahoma. Some of the biggest independents are already drilling the area successfully, and many have committed to expansive drilling programs. For example, large operators with considerable activity are Devon with 430,000 acres and 5,300 locations, Newfield Exploration with 210,000 acres and 3,850 locations and Continental Resources with 146,000 acres, to name just a few. Source: ShaleExperts.com In the example below, with oil shown at $45.00 per barrel (bbl), the gross profit per barrel would be about $31.50 per boe (barrel of oil equivalent). For this example, let’s assume a production mix of 50 percent oil and 50 percent gas. After having paid a lump sum, upfront cash bonus, to the mineral rights owner, plus a promise to pay them the top 20 percent of revenue from production, the oil company would get 80 percent of the revenue, or $25.20 per bbl. From their gross profit, the oil company would then deduct $.75 per bbl for taxes and $11.20 per bbl for operating expenses, leaving a profit of $13.25 per bbl. The mineral owner, on the other hand, after “banking” the up-front lease bonus in advance, receives his 20 percent of the gross revenue or $6.30 per bbl. From that amount, the mineral owner deducts only the $0.19 per bbl tax (ad valorem tax only) for a per bbl profit of $6.11. The mineral owner has borne zero drilling risks, zero completion risks and has paid no operating expenses. The oil company has to invest very large sums of money to accomplish their return on investment goals which -- when compared to the mineral owner’s goals -- seem way out of proportion. The following chart will show what we mean. We have estimated there will be 12 wells per square mile (640 acres, or “section”) drilled by the large operators already drilling in the STACK. In some cases, with improving efficiencies, there may be as many as 17 wells per section drilled. It’s clear from the example given that investing in mineral rights is a smart decision that involves a low-risk investment with a potential for high-yield, in comparison to investing in a drilling operation. We pride ourselves on being transparent and on thoroughly educating our qualified and accredited investors. At Redhawk Investment Group, we have decades of experience developing and managing oil and gas investments. This fall, we’re offering accredited investors the opportunity to invest in our Redhawk Minerals Fund II, LP. This fund, with mineral rights strategically located in Oklahoma’s high-producing STACK play, is projected to be a 30 million dollar fund with an average annual yield target of 20+ percent. Are you curious to learn more about mineral rights and how you can make money from ownership? Get in touch with us today. The material herein does not constitute an offer to see nor is it a solicitation of an offer to purchase any security. Offers will only be made through a private placement memorandum to accredited investors and where permitted by law. Investments in security are not suitable for all investors who can withstand the loss of their investment. Investors should perform their own investigations before considering any investments and consult with their own legal and tax advisors. Past performance does not guarantee future results. This presentation is copyrighted material and only for the use by Redhawk Investment Group and its affiliates. Investing in oil and gas in the U.S. has, at times, intimidated investors, thanks to its relatively high costs and potential risks. For those who want to create wealth within low or moderate risk environments, and who wish to generate cash for future reinvestment, however, investing in oil and gas in the U.S. can be a good fit that yields profitable results. Investors who want to learn more about how U.S. oil and gas investments can help them create the kind of wealth they desire should first consider the three biggest reasons for making such investments. Then, they should consider how they wish to step into direct investment in mineral rights or oil and gas drilling and development investments or both, a decision that Redhawk and its low to moderate risk projects, can help them to make. Investing in oil and gas in the U.S. comes with generous tax benefits. The U.S. government is motivated to encourage U.S. oil and gas investments because they contribute to greater domestic production of these natural resources and, subsequently, less dependence on foreign oil. As a result, investing in oil and gas in the U.S. comes with generous tax benefits that can offset many of the expenses of these investments. For example, deductions can typically be taken from intangible drilling costs, which generally include everything but the drilling equipment itself. These costs, which can constitute 65 to 80 percent of the total cost of drilling a well, may be deducted. And, this deduction is allowed regardless of how the well performs, and regardless of whether or not it ever strikes oil. Other tax benefits that may apply to U.S. oil and gas investments include deductions based on the tangible drilling costs (which can be deducted on a seven-year depreciation schedule), passive vs. active income deductions, and a 15 percent oil depletion allowance for oil revenues. Investors should always look into how these tax benefits will apply to the specific investments and projects they are considering. However, when applied correctly, they can make investing in oil and gas in the U.S. less of an expensive burden and more of a profitable and desirable way to create wealth. Investing in oil and gas in the U.S. provides protection against the effects of economic downturns on investors’ portfolios. Diversification is the bedrock of many successful investors’ strategies. Investing in multiple industries and projects in different forms of ownership can lessen the negative impacts of a downturn in one area by increasing the chances that at least some parts of the portfolio will continue to perform well in other areas. When it comes to protecting one’s portfolio (and one’s wealth) against broad-based economic downturns, U.S. oil and gas investments provide a useful form of diversification. In particular, oil and gas investments within the U.S. tend to perform well when oil and gas prices rise, and the rest of the economy stumbles. Thanks to this trend, the negative effects of an economic downturn can be mitigated at least in part by an improvement in oil and gas stocks performance. As a result, oil and gas investors, enjoy a portfolio that is stronger and more likely to withstand the ebbs and flows of the market, making these types of investments an appealing way to solidify and diversify a portfolio. In addition, oil and gas investments in the U.S. can take a variety of forms. For example, investors may choose oil futures investments, oil drilling investments, mineral investments, and more, depending upon the type of investment and risk they find most desirable. As a result, there are ways to diversify one’s oil and gas assets as well, a fact that many investors find appealing as they seek to build and protect their wealth through diversification. Investing in oil and gas in the U.S. can lead to significant wealth creation. One of the goals of most investments is to build wealth, and U.S. oil and gas investments have the potential for great profitability within a short amount of time. For example, investing in oil stocks during a downturn in the price of oil can yield large profits when prices rebound, one reason that oil was touted in many areas as a strong investment option in 2016. In addition, investing in oil drilling, oil futures, and mineral rights can provide a strong return, sometimes within a short amount of time. This return on investment is often even more appealing because of the tax advantages that apply to many oil and gas investments: The deductions and advantages available reduce overall expenses related to the investment, thereby increasing the amount of profit an investor can make from the project. Wealth creation in oil and gas investments can occur at a variety of risk levels. For example, relatively risky oil futures can be particularly profitable. On the other hand, sometimes, profit can be realized without the high-risk endeavors that investors often associate with oil and gas investments. For example, owning mineral rights can be a way to build wealth without the risk of dry holes or high operating expenses. And of course, there are investment options that carry moderate risk that is neither as high as oil futures nor as low as owning mineral rights. Finding the right investment partner is essential and can help you to improve your success in U.S. oil and gas investments and help you to find the right investments to make. At Redhawk, we are aware of our investors’ desire to enjoy near-term cash returns and to have cash available to reinvest. That is why we provide accredited investors with access to diverse direct oil and gas investment offerings that are designed to provide a strong return on investment. Currently, one opportunity is targeted for a 20-plus percent yield annually, while another will provide significant tax benefits. There are a number of good reasons to invest in U.S. oil and gas; let us help you discover all of those reasons and find the right investment project for your needs. Always make sure you consult a financial professional for questions and appropriate advice regarding the financial impacts of the oil and gas investments in the U.S. that you wish to make. Curious to learn more about the benefits of investing in oil & gas? Get in touch with us. The material herein does not constitute an offer to see nor is it a solicitation of an offer to purchase any security. Offers will only be made through a private placement memorandum to accredited investors and where permitted by law. Investments in security are not suitable for all investors who can withstand the loss of their investment. Investors should perform their own investigations before considering any investments and consult with their own legal and tax advisors. Past performance does not guarantee future results. This presentation is copyrighted material and only for the use by Redhawk Investment Group and its affiliates. |
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