Investment opportunities in crowdfunding are rapidly evolving:
Initially, we showed you how to invest in start-ups for capital appreciation.
Then we showed you how to invest in Real Estate and “Peer-to-Peer” loans to earn yield.
Today we’re going to show you a new type of crowdfunded opportunity:
Crowdfunded Oil & Gas Projects.
The specific deal we’ll share today offers the potential for monthly income, along with the possibility of substantial gains over the next 5 years.
What kind of gains?
From 4 times to 92 times your money.
And as icing on the cake, the deal offers an innovative way to protect your downside.
Let’s take a look.
The Old Way To Strike It Rich
Drilling for oil in unproven areas is called “wildcat drilling.”
When a wildcatter strikes oil, the rewards can be huge.
But this is a risky, expensive proposition. It’s hit or miss.
And for investors, even when a well hits, the accounting can be less than transparent: investors often get paid last, after employees take “bonuses.”
The New (and Less Risky?) Way
A new oil and gas company called Ascenergy is attempting to solve some of these problems.
Ascenergy locates potential wells by using a combination of age-old and modern methods – from seismic measurements and well log data, to gravity gradiometry and geophysical studies.
Since they're fairly new, they don’t have much operating history yet – but maybe they’re onto something: they’ve struck oil on their first two drilling attempts.
Their test well in Oklahoma, for example, has yielded $1 million of oil and gas so far, and according to a third party, has $40 million more in reserves.
Based on their early success, now Ascenergy is gearing up to expand.
Initially, they plan to set up drilling operations at five different sites in Texas. Further down the road, they might drill another three groups of five wells.
That’s going to be expensive, so they’re currently raising $5 million from investors like you on various crowdfunding platforms, and will be raising more as they continue to gear up beyond the first five wells.
Drilling is expected to start in January 2015, and “harvesting” (if they strike oil) would start soon thereafter.
In exchange for capital today, they’re offering investors the potential for monthly income starting in Q2 2015, plus the opportunity for capital appreciation.
Specifically, their financial projections point to the potential of earning 4.3 times to as much as 92.4 times your money.
That being said, they know – and you need to know – how risky a proposition this is.
So to encourage you to invest, they’re offering some protections.
Protection #1 – You Get Paid First
For starters, Ascenergy allows investors like you to participate as royalty holders.
That means you get paid from gross revenue – before any expenses, and before the company’s executives.
They call this an “Overriding Royalty Interest,” or ORRI.
And since gross production figures are verifiable via public 3rd parties, you’d have full transparency into their accounting.
Protection #2 – Diversification
Ascenergy offers you diversification. If the first well doesn’t meet a minimum guaranteed benchmark of production, you’ll be granted a free interest in their other wells until your guarantee is met.
Protection # 3 – Liquidity
Assuming there’s a market for it, your royalty interest can be sold.
To be clear, these three protections don’t guarantee you a financial return – there’s no such thing as a guarantee when you’re drilling for oil.
But they do reduce your investment risk.
The Fine Print
The minimum investment on this deal is $10k.
And according to Ascenergy’s forecasts, if their wells are successful – and that’s a big if – you might earn from 4.3 times to 92.4 times your money in 5 years.
Those are big numbers – so let us warn you again:
There is significant risk here.
Yes, you’ll be granted a free interest in additional wells if your first one doesn’t meet the minimum guarantee.
But if no oil is found in any of the five wells, your investment could go to zero.
If you’re looking for a more conservative way to invest in Oil and Gas, you could look at Master Limited Partnerships (MLPs):
MLPs are generally pipeline businesses rather than exploration companies, so they’re more stable and can offer you relatively high yields…
But there’s less potential there for massive capital appreciation.
It’s Harvest Time
If you’re interested in exploring the Ascenergy opportunity, click here >>
As of today, they’ve raised more than 40% of their $5 million round.
As they say at Ascenergy, with royalties to investors expected to start flowing in Q2 2015, it’s “Harvest time”!
(Please note: Crowdability has no financial relationship with Ascenergy, or with any of the crowdfunding platforms it’s on. We’re an independent provider of education, information and research on start-ups and alternative investments.)