Phoenix Capital Group Holdings I to Sell Notes for Drilling
The oil and gas operator is proposing a note offering to fund owned drilling, mineral and working-interest purchases, and working capital.
Phoenix Capital Group Holdings I, LLC is proposing to sell notes to fund a three-pronged oil and gas strategy: direct drilling of operated working interests, acquisition of royalty assets, and purchase of non-operated working interests for exploration, development, production, and sale of crude oil, natural gas, natural gas liquids, and other byproducts through PhoenixOp, Firebird Services, and Firebird Marketing.
The company said it plans to use substantially all of the net proceeds to make investments in PhoenixOp or otherwise finance potential drilling and exploration operations, to purchase mineral rights and non-operated working interests as well as additional asset acquisitions, and for other working capital needs. 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.
The issuer said it began operations with a specialized software system designed to identify, analyze, underwrite, transact, and manage oil and gas assets, acquired its first mineral interest, and later expanded its team. It said it commenced direct drilling and spudded its first wells, with a first owned well beginning hydrocarbon production, and that it expects those direct drilling operations to be a core component of the business going forward.
The notes are to be issued in registered form, are not to be listed on any securities exchange or automated quotation system, and would be transferable only with the company’s prior written consent. The company said there is currently no established public trading market and that investors must be prepared to hold the notes to maturity. Crescent is to offer the notes on a commercially reasonable efforts basis, with sales intended to close on a weekly basis, and investors must generally satisfy minimum financial suitability standards.