The Mitchell Group and Redhawk Investment Group Announce Formation of Redhawk Minerals Fund I, LP - STACK Play
Aug 30, 2016, 05:13 ET
DALLAS, Aug. 30, 2016 /PRNewswire/ -- N. Malone Mitchell 3rd of The Mitchell Group and Jack Nichols of Redhawk Investment Group announced today the formation of Redhawk Minerals Fund I, LP, a $58,000,000 mineral rights acquisition offering. The partnership management which, with The Mitchell Group, has over 100 years' collective experience in the famously productive STACK (Sooner Trend, Anadarko basin, Canadian and Kingfisher counties) area in the Anadarko Basin in central Oklahoma is designed to acquire, own and administer mineral interests. Both companies are headquartered in Dallas, Texas.
Redhawk Minerals Management has said timing is perfect now for mineral acquisition as many mineral owners'/sellers' price related expectations generally decline in proportion to the price of oil. This can translate into the ability to acquire acreage at very competitive prices. Unlike many "hot" plays in the US, mineral ownership in the STACK is highly fragmented and many times involve first-time sellers whose ownership could date back to the Oklahoma Sooner Land Rush days in 1889. This may result in smaller individual tracts that often can be acquired at lower prices. Drilling activity in the area is brisk and purchasing mineral rights "in front of the bit" is a goal.
Mineral rights ownership, as an asset category, is a lesser known form of investment vehicle more commonly found in institutional type offerings. This offering allows qualified private individuals to gain direct entry into mineral rights ownership. As drilling and production occur, mineral rights ownership can provide the opportunity for the owner to receive handsome up-front, lump-sum bonus premiums to lease plus royalty payments, ranging anywhere from 12.5%-25% of the gross revenues from producing properties. This lucrative, passive form of income, combined with mineral owners' bearing no development risk, no drilling risk, no completion risk or dry-hole risks and incurring only nominal costs to carry make it a very attractive opportunity.
Long sought after, mineral rights ownership is one of the truest forms of legacy assets. The mineral rights never expire. Oil companies lease the rights from the mineral owner and pay lucrative bonuses to have the right to drill. When they find oil, the mineral owner will receive royalty checks until the lease is no longer commercially profitable. If the oil company never drills or if their leases expire, the whole lease bonus, royalty payment process can repeat itself.
Nowadays, there are areas where oil and gas development has occurred, primary zones have been depleted by drilling activity, and newly discovered primary and secondary technologies have brought the fields back into production. These recurrent technological advances may allow the mineral owner to repeat the lease bonus and royalty revenue income scenario. The revenue streams can go on for generations.
The STACK play, now in its infancy, is being compared to the early days of the Bakken Shale in North Dakota. Large Independent oil companies, like Devon Energy, Cimarex Energy, Continental Resources and Newfield Exploration have significant acreage positions in the play and can average 500 – 1,000 barrels of oil equivalent per day.
Qualified investors and registered agents are invited to contact the company at 844-952-7363 or by e-mail to [email protected] for more information on the offering.
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SOURCE Redhawk Investment Group