Phoenix Operating Seeks Notes to Fund Drilling and Royalty Buys
The oil-and-gas operator is offering unlisted notes to finance operated wells, mineral and working-interest purchases, and working capital.
Phoenix Operating, LLC is offering notes to fund a three-pronged oil-and-gas strategy that combines operated drilling, royalty assets, and non-operated working interests. The company said it plans to use substantially all of the net proceeds to invest in PhoenixOp or otherwise finance potential drilling and exploration, to purchase mineral rights and non-operated working interests as well as additional assets, and for other working capital needs.
The company said it operates through PhoenixOp, Firebird Services, and Firebird Marketing and executes on that mix of direct drilling, royalty acquisitions, and non-operated working interests for exploration, development, production, and sale of crude oil, natural gas, natural gas liquids, and other byproducts. Direct drilling is currently focused on development in the Williston Basin in North Dakota and Montana and the Powder River and Denver-Julesburg Basins in Wyoming. Royalty and working-interest acquisitions have historically targeted the Williston, Permian, Powder River, Uinta, and Denver-Julesburg Basins, and the company said it is agnostic as to geography and prioritizes operational and asset potential.
Phoenix Operating said it began operations with a specialized software system used to identify, analyze, underwrite, transact, and manage oil and gas assets, then acquired its first mineral interest and later expanded its team. It said it commenced direct drilling operations and spudded its first wells, with its first owned well commencing hydrocarbon production, and that it expects those direct drilling operations to be a core component of the business going forward.
The notes will be issued in registered form, are not listed on any securities exchange or automated quotation system, and have no established public trading market. Holders may transfer only with the company’s prior written consent, which it may grant at its sole discretion. The company said investors should be prepared to hold the notes to maturity and must generally satisfy minimum financial suitability standards.