Aspen Energy Fund VI - Closed 1/31/24
Diversified Oil & Gas Portfolio
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overview
Aspen Energy Fund VI is a diversified Oil & Gas portfolio. This Fund will be focusing on investing in a combination of existing producing assets for current cash flow (PDP) along with acreage for new drilling for upside value (PUD). We’ll be targeting multiple basins.
The Fund will generally be focused on investing in non-operating working interests (“NOWI”) and overriding royalty interests (“ORRI”). This reduces operational risk but gives the opportunity to participate in new drilling programs.
How Does The Fund Work?
Fund Structure – Key Items
1-Year capital raise & deployment period, may extend
We will be accepting subscriptions on a first come, first serve basis
Capital will be accepted as acquisitions are made and we will operate on a waitlist structure
First year of Fund, expect to reinvest 100% of profits into to new drilling programs to compound returns
Will target distributions starting in Year 2 and thereafter growing over life of Fund.
INVESTMENT BENEFITS
OPPORTUNITY
• We believe now is an opportune time to acquire direct interests in oil and gas plays to position long-term for favorable economic fundamentals
• Many large banks & funds are predicting higher oil prices over the next decade due to limited supply and increasing demand
• Market currently isn’t pricing in this upside and because of the ESG initiatives, many large capital allocators have left the space
STRATEGY
• Partner with long-time manager & engineering firm with over 40 years experience, and a 5-project track record
• Directly invest in diversified portfolio of producing oil & gas plays in proven basins + strategically participate in new drilling programs for upside
• Acquisition targets will primarily be NOWI & ORRI alongside large operators
FUND STRATEGY
BUY EXISTING PRODUCTION.
Fund will target acquisition of existing, producing wells at a good value either through NOWI or ORRI
As focus of Fund will be on maximizing total return, we will prioritize projects that have strong potential of PUD projects
PARTICIPATE IN NEW DRILLING
As a direct investor of the working interests, our Fund will have the right to participate in new drilling programs proposed by operators
Our team of geologists and engineers will review every proposed well and decide if we will participate
We have the right to participate, but not the requirement
MAXIMIZE VALUE & TOTAL RETURN
Fund’s mandate is to maximize total return to the investors
We expect 100% of year-1 cash flow (and partial reinvestment thereafter) to be reinvested into new drilling programs
By reinvesting cash flow from Fund into new wells, we can compound returns and maximize cash flow & sale value
Our Track Record by the Numbers
FREQUENTLY ASKED QUESTIONS
How long has Aspen Funds been managing funds?
Aspen has been managing funds since 2013 across a handful of asset classes. Aspen has never missed an investor payment, nor have we lost any investor’s principal investment capital to date.
What is the minimum investment?
The minimum investment in the 116 Upstream Energy Fund VI, LP is $100,000.
What is the lock-up period on this fund?
The fund life is expected to be 10 years; however, our team is always evaluating exit opportunities and will consider exiting early should it benefit investor returns.
How often will I be updated about my investment?
Every Aspen investor is given an investor portal to track investments whenever they would like. We provide capital account statements, investor newsletters, and financial statements on a quarterly basis. We also always welcome calls from our investors.
What’s the difference between working interest and royalty interest?
Operating Working Interest: an interest in an oil or gas property through an operating agreement, lease, fee title, or another arrangement. The owner must pay part of the expense of the property’s operating costs, including drilling, leasing, and operating oil and gas wells. In addition, the working interest owner is entitled to a percentage of the oil and gas revenue.
Non-Operating Working Interest: refers to an interest in an oil and gas property that does not participate in the day-to-day operations of drilling, testing, completion, and maintenance of the production or the sale of the minerals produced. Unlike royalty interests, non-operating working interest must pay a portion of the costs associated with the day-to-day operation of the well, but also is entitle to a percentage of the oil & gas revenue.
Overriding Royalty Interest: a property interest that entitles the owner to receive a share of the production revenue. A royalty interest owner doesn’t pay for operational costs required to produce the resource, though they still are entitled to a portion of the revenue produced. A royalty interest exists as long as the company leases the land and continues drilling.
Will I own a specific oil or gas well?
No. Investors in this Fund will be part owners of the Fund shares and thereby a portion of all assets owned in the Fund. Based on the strategy of the Fund it is anticipated there will be numerous wells, basins, & operators in the assets creating a diversified portfolio.
The Fund will focus on investing in a combination of multiple existing producing assets for current cash flow (PDP) along with acreage for new drilling for upside value (PUD). The Fund will generally be focused on investing in non-operating working interests (“NOWI”) and overriding royalty interests (“ORRI”). This reduces operational risk but gives the opportunity to participate in new drilling programs.
Are there tax advantages?
Yes. However, the 116 Upstream Energy Fund VI, LP is primarily focused on maximizing shareholder returns vs. primarily generating tax losses. As such, while we anticipate tax advantages to be passed through to the limited partners, our goal will be to make acquisitions first based on investor overall returns. Oil and gas investments generally offering tax advantages through depreciation, depletion, and intangible drilling costs.
Investors may elect to take part in either the GP side offering advantages toward active income or the LP side offering advantages toward passive income. It must be noted, taking part in the GP comes with additional risks.
Can I invest with an IRA or 401K?
Yes, our funds allow investment through qualified retirement money. This must be done through a self-directed IRA or 401K. If you don’t yet have a self-directed account, we can make introductions to several custodians that we have worked with.
Additionally, some funds implement leverage leading to the possibility of generating Unrelated Business Income Tax (UBIT). We would ask that investors speak with their tax professional about potential implications.
Do I need to be an accredited investor to invest in the fund?
Yes, our funds currently only allow accredited investors.
What is an accredited investor?
An individual or an entity can generally qualify as an accredited investor if they meet at least one of the following criteria:
- an individual with income exceeding $200,000 or joint income with his or her spouse of at least $300,000, in each of the last two years with the expectation to reasonably maintain the same level of income in the present year
- an individual with a net worth exceeding $1 million, excluding the primary residence, either individually or jointly with his or her spouse;
- an entity that has assets exceeding $5 million that was not formed solely for the purpose of making the investment; or
- an entity whose owners all satisfy 1, 2, or 3 above.
- holds in good standing a Series 7, 65 or 82 license.
For more information about the requirements of an accredited investor, see this bulletin from the SEC.
TESTIMONIALS
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