SLU is right for any type of investor
Historically, the only option for investors to participate in the energy space was through public equities, private equities, or risky non-operated interests in assets, with little-to-no influence on how these assets were developed or operated. Instead, the SLU Marketplace will create a new standardized commodity of “oil in the rock”, an opportunity to leverage climate awareness within O&G industry.
Direct Asset exposure to the best Permian Basin acreage that will produce O&G in the most responsible way.
SLU is a driving force to a more transparent and ESG driven Oil & Gas asset market
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Family Offices
- Investing for cash flows
- Diversification on several SLE shares reduces risks
- Depending on sophistication, take speculative positions on evolution on Ryder Scott rating
Insurance Companies
- ESG is a must have (regulations, internal policies, members)
- Cash Flows from SLEs is the main motivation. Insurers will invest ahead of capital calls to get financial returns on investments
- Long dated developments are interesting hedges against inflation
- SLU Notes provides good yield within ESG ecosystem with great trading MTM collateral
Hedge Funds
- Arbitraging SLE shares vs the price of Oil & Gas
- Trading SLE Shares on news flows
- Read across from value of SLEs to Capitalization of listed E&Ps
- Accumulate positions and trigger changes of Prime Operators for good reasons
- Price discovery on all different parameters leads to better hedging
Trading Firms
- Take speculative positions ahead of evolution on Ryder Scott rating, deep knowledge of well control
- Take positions in core Permian Basin, strategic oil
- Options on future delivery of Oil & Gas returns in several years
- Arbitraging with crude oil future deliveries
Large Asset Managers
- ESG is a must have (regulations, internal policies, members)
- Diversification on a new asset class, low correlation with existing portfolio
- Access to real assets with no specific knowledge – Heavy reliance on RSC rating
- Access good returns in hard-to-find ESG assets
- Make an immediate impact
E&Ps and O&G
Specialists
- Creating SLEs and listing them on Marketplace
- Transition to lighter balance sheets and Asset Management remuneration Model
- Arbitraging SLE shares depending on quality of Rock and perceived evolution of technology
- Trading SLE Shares on news flows
- Sell SLE shares for Capex Funding
Pension Funds
- Make an immediate impact – ESG is a must have (regulations, internal policies, members)
- Diversification on a new asset class, low correlation with existing portfolio
- Access to real assets with no specific knowledge – Heavy reliance on RSC rating
- Access good returns in hard-to-find ESG assets
- Hedge against Energy Prices Inflation through SLEs with Long Term Development plans
Lenders
- Safer lending thanks to liquid Mark to Market Collateral
- Lower yields but better margins through bulk lending to portfolios of SLE notes
- Finance Extra Capex for ESG compliance made easier with ESG trading premium increasing value of collateral.
Sovereign Funds
- Build Strategic Positions on Crème de la Crème Oil & Gas assets
- Gain exposure to Future Production of Oil & Gas
- Back outstanding Operating Companies by accumulating positions on their SLEs
- Convince/push E&Ps to transition to leaner balance sheets for better investors ROI
- ESG is a key angle to make sure portfolio stands future policy changes
SPAC
Leveraging Specialist Investor´s higher financial skills:
- Transformation of Raw Acres in an ESG Investable Product
- A shorter timeframe: 18 months to 3 year process
- Large valuation differential (up to 7 times return VS Generalist ESG Investor)
- Value creation by feeding the market
Current Situation
Despite big challenges in the global energy landscape, there are strong opportunities for the Oil & Gas industry, which is working tirelessly to supply an ever-growing demand. In the current geopolitical context, with high oil and gas prices that are predicted to continue their upward trend, the world shall continue to be dependent on fossil fuels. However, this also creates an environment ripe for investors to play an important role in re-shaping the industry and bringing climate impact to the forefront of the industry. There is room for important changes within the sector, regardless of how the energy system evolves.
The Permian Basin Crude is becoming increasingly important as a reference world index. The Basin, which is the richest oil producing region in North America, has over 50 years of production left. Cleaning up Permian production will have a big impact on decarbonization objectives.
The SLU Marketplace is a unique opportunity to invest directly in the Permian Basin, and thus push forward a responsible energy transition, one that does not impair energy supply and does not affect energy access.
SLU Marketplace as a solution: A Liquid New ESG Asset Class
SLU is a driving force to a more transparent and ESG driven Oil & Gas asset market. By leveraging a field proven expertise of responsible production, as well as an understanding of Capital Markets and Investor Requirements, SLU provides the framework to create positive impact through a collaborative effort space and an independent marketplace.
Historically, the only option for investors to participate in the energy space was through public equities, private equities, or risky non-operated interests in assets, with little-to-no influence on how these assets were developed or operated. Instead, the SLU Marketplace will create a new standardized commodity of “oil in the rock” from the best Permian Basin acreage.
SLU Enterprise is an opportunity to leverage climate awareness within O&G industry and empower responsible managers and individuals, while keeping up expectations for strong, risk-adjusted returns.
Investment Benefits: Fully Developed Offering
An SLE means the acquisition of long-term positions in oil and gas, coupled with options and protection against inflation in energy prices.
The SLU process opens the market to Generalist Investors not currently equipped to appropriately assess Oil & Gas assets.
Investors can participate without the exploration, timing or uncertainty risk due to the firm development schedule and 3rd party rating from Ryder Scott. Thus, an SLE becomes a Transparent Investment Product.
Investor and Shareholder returns will represent the highest quality, ESG certified Energy Investments. ESG Ratings and Standards will demand premium resale values.
SLU Enterprise has spent nearly three years creating a standardized structure, market rules
and legal framework for investors
Benefits to investors
Uncover value for Permian Oil & Gas, the most strategic resources in the world. Technology, Governance, ESG, Political safety are key value triggers.
- Provide new sources of capital to develop ESG aligned acreage and be rewarded for it
- Discover the prices of optionality. How much is worth a right to receive revenues from the clean production of oil in 2028?
- Investors see this as more granular and much more profitable way of asset-backed investment in the US Oil & Gas production. No Due diligence needed as assets are rated.
Key First Mover Advantages for Initial Investors
- First movers in the SLU Marketplace will have early access to a growing marketplace and will see highly attractive returns through traditional development of the asset.
- Values are almost certain to be lowest in initial stages as market moves from historical, operator-driven framework to financial market, option-based framework.
- Highest potential arbitrage opportunities
- As the Marketplace matures, the potential for increased returns grows alongside a liquid market
Unique Marketplace
With modern financial modelling, a climate impact Marketplace will emerge for standardized, tradeable securities created by combining Permian Basin operating expertise with strict non-venting governance; a new market for Working Interests and Royalties in O&G, with its own valuation and pricing characteristics. By simplifying valuation techniques, generalist investor participation is promoted, and efficient price discovery mechanisms are created.
Through the Marketplace, investors can purchase shares in Individual Drilling Units (SLEs), which are defined by standard acreage size, a contractual development plan, and a rating. A Standardized Asset with Quality & Commerciality Ratings from a trusted third party is created. This direct asset investment will provide high yields and low risks, also allowing a fractional Ownership model for “ESG aligned” O&G assets.
This new Marketplace for ESG aligned standardized oil and gas assets, has every chance to be just as active as physical Oil & Gas markets.
The Marketplace´s unique characteristics
provide investors a direct exposure to a high yield new asset class
without going through a complicated process:
Buying shares in standardized SLE´s can be as simple as buying a share on a stock market.
