Rigs to Riches Ep. 13 - Oil & Gas Investing for EVERYONE?

So we’ve been backed by uh three different PE funds over the last 20 years. So we’ve deployed about $750 million for those three PE funds all in upstream oil and gas assets over the last several years. So that that’s really our where we’re comfortable. That’s the space we know. But we’re very good at originating, vetting, and managing upstream oil and gas assets. And then we’ll get into our motivation for doing this in a minute. But Adrian, do you want to introduce yourself? Sure. Thanks, Casey. Thanks for having us. Glad to be on here. So, my name is Adrien MSAS. I’m based in Fort Worth. I’ve been partnered with Chip uh since 2019. So, I’ve worked with him for a long time at a previous company where we managed all those assets you just mentioned for private equity. Before that, I was a partner in a land services business. So, in the oil and gas space, a land services company goes out and puts together lease positions, mineral positions, operatable assets for oil and gas companies. I was a partner in a company that we scaled up to, you know, about 500 landmen. So, if you’re familiar with what a landman is, we were in the business of hiring, training, you know, staff or land personnel to go put together acreage positions for oil and gas companies. We worked for, I mean, basically everyone across the country. We scaled that business up to, as I mentioned, 500 or so guys. We ended up actually selling that company uh to a private equity group out of Dallas in 2018. That was very much consulting. You know, we’re out in the field. We’re we’re training staff. We’re building uh project personnel. After we sold it, you know, I wanted to move to this side of the business. So, my first phone call was to Chip Simmons. Uh he was a client of mine, known him for a long time, had a great relationship with him, and joined him in 2019 at Titanium to kind of lead the business development efforts. So my role, you know, is I’m the guy out there. I’m the deal guy. I’m the deal junkie. I’m the business development guy. I leverage folks that I’ve worked with. You know, I have great network of folks I’ve hired, guys. I’ve worked with different companies, old clients, just kind of old buddies. You know, after 15 years of going to all the various events and conferences and happy hours. You know, I’m the guy that’s trying to find 10 acres in Midland County or 2,000 acres in North Dakota. Cool. Well, Chip, I’m going to kick it back to you, but real quick, I want to help tie it in for our audience that might be might be real estate investors. They might be oil and gas investors, might be just regular old W2 professionals that would like to invest in oil and gas or real estate at some point. Maybe they are, maybe they just have been dreaming about it someday because all they’re hearing about all these good things and all the money that their their colleagues are making, right? And they’re hearing around the water cooler. Maybe they’re hearing it the country club. But I want to talk about like in oil and gas and in your guys’ space typically how do those structures work? How do people invest in it? Before we get into the really cool tokenized stuff, like just in general, how does investing look like that? How do how does an investor get in and invest in some of the stuff some of the things you guys have done? Yeah, it’s really not easy. And that was one of our motivations for building tokenized energy. But for your average person that’s not average investor that’s not in the position that we’re in. I mean we’re paid and we’ve been back to originate deals. So we are kind of the ground level guys. And so by definition if you’re not one of those people and there’s you know a handful of us around that do have ground floor access. But if you don’t have that access then it’s difficult to get into those deals. And so you’ve got a few options. I mean, one is if you felt comfortable enough to bid on your own, you could go to one of the online, you know, oil and gas marketplaces and you can bid on deals. Like there’s a company called Efficient Markets. It used to be called Energyet and anyone can go on there, sign up for an account, and if you’re I do think you have to be accredited, but if you’re an accredited investor, you can go on there and bid on deals. And I think the only challenge with that is if you’re the winning bidder, you leave happy. But if you don’t win, then you don’t get the asset. So that that’s a difficult way for an average investor to deploy. You know, the other way to do it is to find one of the funds that are out there and invest, you know, through one of those funds, but those aren’t the easiest thing to find. And they’re actually not that, you know, many of those that are out there either. And so by default, you know, your average investor that doesn’t have the kind of access that we do ends up really with public energy stocks. And a lot of times those are, you know, you have market exposure. You don’t have direct contact with the assets. And so, you know, the part of the solution that we wanted to devise really solves for that access problem. And so, you can go on to our platform, you can open an account, you can indicate whether you’re accredited or not. A lot of these offerings are for accredited investors only. So you you may face that depending on what your situation is. But then once you’re approved as an investor on our site, we’ve got, you know, an app on the App Store. We’ve got an app on the Google Play. So if you have an Android, you can download the app there. So what we say that we like to do is we we put oil and gas investing in the palm of your hand. And so we’ll get into the structures and all that in just a minute, but it really solves for the access problem. And so we try to make that easy. You know, minimum investments are in the $500 range. If we look at, you know, the investments on the last deal that we just closed, they ranged in size from 500 on the low end to 20,000 on the high end. I would expect that minimum to stay the same, but sort of the average investment size will probably grow over time with our deal size as we get more adoption and more investors signed up on the platform. Wow. Okay. Now, what is it typically just you keep going with it and maybe Adrian you can answer this one and go with it but typically like you mentioned being on energy net and bidding out for deals or and and I’m also going to assume that like if you’re investing in a fund minimums are like what 50 100 like what are the investment amounts if you’re not going through like what you guys are talking about with tokenized Adrian you want to take that one sure yeah I I was also just gonna going to add on so say you know if you win a deal on energyet or clearing house there’s some really reputable auction houses you know one of the differences between that and and what we’re doing is is if you win there, you have to manage the asset, right? You also have to hire an engineer to underwrite the asset. You have to also understand kind of the legal documents, the paperwork, the back office administration, you know, when you take direct ownership of those assets. What’s different here is, you know, we have a team of, you know, engineers, land personnel that has done these deals, you know, for, you know, quite literally Chip has deployed, you know, over 700 million dollars for private equity funds. And so, one differentiator here is the technology enables folks to get access to those deals without necessarily having to deal with all of that other sort of headache and those other barriers to entry outside of your your pocketbook, right? So what we do is we provide you know a full engineering analysis, financial model, the documents, everything’s there and you know so you can you can look at it and you can kind of make a judgment. Here’s what we think these wells are going to do. Now what I will say is you know we’re starting off you know one we know how to underwrite these deals. We’ve done it a lot you know but most of our users so far are oil and gas professionals unsurprisingly. We have engineers at companies you know in the Peran Basin who are downloading our data. We make everything available to you as an investor. So if you want to look at the offset wells, you know, say, you know, Chevron drilled some wells right next door, here’s sort of the production data. We make that data available to you. Um, so we provide the data as if you’re, you know, a petroleum engineer for accidental or Exxon. Those people are participating in these opportunities because we make that data available, but also you kind of have our team’s view of here’s what we think it’s going to do. Um, so I wanted to to to just kind of point that out. And yeah, you’re right. The the biggest barrier entry is usually pocketbook. You know, if you’re going to invest, you know, in a fund, generally speaking, you probably need a quarter million dollars to get in $100,000 for minimum to get certain some of these funds. People don’t want to mess with $500, $5,000 check writers because you have to deal with the administration of the paperwork behind them. And that’s another reason why the technology is so good for us because you know right now if we have a thousand donors and a small opportunity we don’t have to write a thousand checks and put a thousand stamps and envelopes. The blockchain makes it possible for us to literally convert uh you know a payment from Kico Phillips into USDC stablecoin click a button and the smart contract distributes that money to all the investors without us having to go to the US postal office. So, you know, the technology enables us to take on smaller checkbook writers that other companies can’t do. And so, it solves the problem, you know, in in many ways for folks to get access to these deals. Wow. Love it. Okay, I’m ready to start getting into technical stuff, but just again to recap for some people who maybe aren’t tracking with the power of this. So, like Adrian said, 100,000 minimum, probably more like 250,000 to get traditionally historically to get into deals like this. That’s the amount you had to invest. And we’ll talk later, dive into like some of the value and some of the returns and why we love like why I’m actually why literally I’m working on an offering within my fund to go do oil and gas stuff because I’ve just seen the returns and some of the depreciation, a lot of the tax benefits, right? There’s tons of those. But I want to dive into like how are you guys able to do this? How are you guys able to not have people writing checks, right? Investing a minimum of 250,000 talking blockchain, right? Let’s let’s get into it. Well, it’s really, you know, blockchain technology that makes it possible. And so the way we do it just, you know, mechanically at a high level is when you open an account with us, everything’s typical. It’s like opening account everywhere else until you get to the last step. And the only thing that’s different about us is that you create and attach a digital wallet, which people that may have invested in digital assets in the past may have familiarity with it. But whether you do or not, we integrated with Coinbases, they don’t even call it a wallet anymore. They called it their base account, but literally in three clicks on our site, you can create and attach a digital wallet. So, so even if you’re a newbie to the digital asset space and haven’t had one before, it’s it’s very simple. It’s very easy. And we’ve got several hundred signups now of people participating in our our site. And I I promise you that not a single one of them has had an issue with creating and attaching a digital wallet. So, it’s not something to fear. It’s not something to worry about. It will feel very natural to you. We walk you through the process and it’s really simple and it’s actually the simplest fastest part of the signup process. And when you when you attach a digital wallet, the significance of that is it does not give us control over your wallet. So I always want to make that point to people. When you attach it, all that’s doing is giving our platform the address of your your wallet or your account on the blockchain and it tells us where to send your coins. It’s literally like you giving us your email address so that we can contact you. It’s just done in a digital environment. And so if you review the data room and you decide you want to invest, it’s uh super simple. You sign a few docs and then when the offering closes, you’ll get two things from us. One, you’ll get a digital token which represents your equity interest in the special purpose vehicle that owns the asset that you’re investing in. So it’s not a blind pool. You know what asset you’re investing in. That SPV only owns that asset. So the digital token you’re receiving is is not crypto. It is like a digital stock certificate. It it’s just a digital representation of your equity ownership. And you have all of the same legal rights that any owner of that SPD would have if there was no digital token. So, your legal rights are the same. And we get that question a lot because one of the common misconceptions is is that yeah, there’s this vague asset in the background and what we’re issuing to you is a crypto token that has no connection with reality. That’s not the case. I mean, what we’re doing is not crypto. It’s a digital asset which is backed by a real world asset in a very direct concrete legal way. So, the two things you get are that digital equity token. The second thing you get is when that asset starts producing, if it’s not already, then when we get the cash flow from the operator, we convert that into a USDC stable coin and we issue that right out to your wallet. Now, we do that through the smart contract. Like, I don’t know how many of your listeners may be familiar with that, but you know, a smart contract is sort of the it embodies the terms and conditions of the token that’s being issued on the blockchain. And the smart contract has a lot of things you can build into it, but for this purpose, the most important one is the cap table for the asset. So, it identifies how much Casey and Chip and Adrian own in that asset. And when we take that USDC stable coin, which is a dollar equivalent, dollar redeemable stable coin, we literally just hit send and that smart contract runs it through the cap table, divides it up in accordance with our respective interest and sends it directly out to your wallet. When you get that USDC, you can do whatever you want with it. You can send it to your Coinbase account. You can convert it to US dollars and withdraw it to your bank. you can hold it on our platform and invest it in the next deal. So there’s no restriction on your USDC on the digital token you get from us though that is transfer restricted. It is a private you know security that’s issued under regggd because we’re we’re SEC compliant and so that is a transferrestricted token but on the cash you can do whatever you want with the cash equivalent that you receive from us. Wow. Yeah man. I’ve heard it a couple times, but every time I hear it, I learn a little bit more from like the coins to how fast you guys move it. Wow. I’ll let Adrian go. Anything you’re gonna add to that? Yeah, you know, just just one thing I kind of want to point out too is if you’re looking, you know, as just a new investor, you’re unfamiliar with oil and gas, you start googling or searching on, you know, wherever you go look for opportunities, you know, you’re probably going to start finding guys who go out in the middle of, you know, go out and drill their own wells and use, you know, technology, use social media marketing to raise money around their own drilling prospects. One of the things that’s a little different about what we’re doing is, you know, Chip and Asian are not going out to Russ County, Texas, and drilling 10 wells with your capital. That’s not what we’re doing here. Tokenized energy, you know, in our background is primarily, well, Chip’s done, we’ve all done kind of a lot in the industry, but we’re finding opportunities with the best operators in the country and the some of the best places in America. So, for example, right now we have deals up on the platform that are live that are with Kico Phillips. You know, you you’ve put gas at a Kico Phillips station. If you’re new to the space, you know, you can kind of trust that Kaneka Phillips knows what they’re doing. You know, they manage some wells and operate some wells in Lee County, New Mexico, which is one of the four or five best counties in America to invest in oil and gas. It’s in a good spot. And otherwise, you’re putting money into an opportunity that has been drilled for three years. There’s consistent cash flows on that specific opportunity. That is very unique compared to the other kinds of deals that are attracting new kinds of capital. Generally speaking, you’re not getting into a Kanico Phillips steel in Lee County. You’re getting into John Smith operator is drilling six wells in some more speculative or exploratory areas. That’s not what we’re trying to do. And so I just wanted to kind of highlight that too because Chip’s pointing out some fantastic points on the technology and why it’s different. But on the oil and gas side, if you’re new and you’re just unfamiliar with it, you know, we think we have opportunities that are exciting to people that are also in the industry. And I think that’s a big part of why we’re seeing so many guys who, you know, work for ABC operator or own minerals over here and have experience. They’re also investing in, you know, in these properties on the platform because they can recognize, you know, this is Gulfport Energy in Ohio. They’re prolific in this area. They’ve drilled hundreds of wells here. They’ve been there, you know, over a decade. You know, they they know this area. They have the pipeline infrastructure. They have everything kind of built around it. So, just wanted to point that out. Yes. Well, listen, I want to talk to both sides of it now, guys. I want to because for me, I’m super interested how it’s working out as the capital raiser, being able to give other people opportunities to invest. So, we’ll go there next. But first, let’s just keep it on like the investor level, right? So, you just talked about like all the benefits. They get exposure to bigger operators, right? maybe less risky investments, but any feedback or any thoughts you guys have on a brand new like let’s go from the brand new investor who’s maybe actually a real estate guy or maybe it’s just a W2 that is interested and knows there are a lot of upside oil and gas like them kind of going in. You mentioned you guys have like all the disclosures, all the stuff like on the portal like say they’re trying to do their due diligence and make an investment. I’d be curious like how a brand new person does it and then you can also talk about a more sophisticated person that has been doing this and they just want to get maybe maybe they want to get exposure to multiple offerings. Well, I’d say we try to make it easy for both, but we also know that a lot of our initial investors are going to be people that are already familiar with oil and gas. So, one of the things you can take comfort in is that when you go into the data room, and there’s a full data room built out for each um opportunity, but it starts with an investor presentation and then it’s got a financial model. It’s got, of course, all the legal docs in there, which are all the typical stuff there. Nothing really unusual there. And then there’s all the support for what’s in the investor presentation. I’d say if you’re unfamiliar with it, then the support uh won’t mean that much to you. the the higher level investment presentation is probably where you’ll get the bulk of your information. And then if you want to ask us questions, there’s contact info posted in the data room. We’re always here, you know, to be helpful and and answer whatever questions you you have. I mean, at the end of the day though, I will say from an SEC’s perspective, it is your choice. Like we’re we’re putting the information out there, but we’re not your financial advisor. And so that’s ultimately is a decision that you have to make yourself. So you you’ll see all the the typical SEC disclosures on there, but we have it set up so that it makes it easy for someone to to navigate even if you’re you’re new to the space. And we’re here to help you if you have questions and need to understand a little bit more. But we’ve also built the data rooms because we know what the experienced oil and gas investors are going to ask for. And so we really haven’t had hardly any requests for additional information so far because we know what to put on there. we know what they’re looking for and we go to the effort of posting it all on there. So, very transparent, lots of disclosures, lots of information and we make it as easy as we can for you whether you’re experienced or not at oil and gas investing. I was just going to add, you know, if you’re a real estate investor, you’re probably familiar with some of the tax benefits that go along with real estate. And so, oil and gas, you know, there are some tax benefits that we can pass through to the investors. Again, we’re not your CPA. You have to look at it in your own. to talk to, do your own your own uh research into that. So, I have to disclaim everything in terms of uh financial advice or tax advice, you know, but oil and gas, for example, uh if you’re doing what’s called a drilling deal, you know, we we have a drilling deal on the platform right now with a publicly traded operator in a great area, you know, we believe that there are IDC tax benefits that can be passed down to investors if they participate in that specific opportunity. And so that’s that’s another thing that, you know, I think makes us a little different. In some situations, groups who put together funds like this maybe don’t pass those through. You will get a K1 at the end of the year that kind of lays out, you know, depletion, anything that any anything that we think, you know, you could potentially get a tax benefit for. Ship, are you are you comfortable with that answer on the taxes? Absolutely. I mean, the big benefit, it brings up another point, Casey. One of the things that we’re going to do is everybody’s at a different place on the riskreward spectrum. And so oil and gas assets depending on what they are fall at different, you know, positions along that spectrum. So, you know, the most risky, you know, highest returning things are new well participation. We personally like those, but we don’t assume that everybody else does. And those carry with them the best tax benefits because you get what are called um intangible drilling cost deductions which typically cover you know 70 to 80% of your cash flow in the first year after that well starts producing. So it’s a pretty phenomenal tax benefit and it’s there you know to incent new drilling and so depending on the admin these have been around for a long time and it’s a very common uh tax benefit in oil and gas and we do pass those through to the investors based on everybody’s relative interest in the entity. So, new well participations get that along with a handful of other benefits that Adrian alluded to, things like depletion, for example, which is boring to talk about, but it’s nice to get, you know, the tax benefit. You could also have on there and we have a small, so far we we’re four deals in, two are closed, two are live, but we’ve posted three new well participations and one PDP deal. And if you’re unfamiliar with that slang, uh PDP just stands for a producing asset. PDP is an SEC based reserve classification, but everyone in the oil and gas business uses that to refer to assets that are already producing. So if an asset is already producing, then it’s a PDP and it’s less risky because you’re not having to deal with the things that could conceivably happen while the well is being drilled. So that’s been done. that risk is behind you and then the well is producing. If that well needs a workover or something like that then there might be additional capital required. There other risks like a frackit risk for example that could happen. So PDPs kind of reside in the middle of the riskreward spectrum. You got new well participations at one end. You got PDPs in the middle and then the least risky which is an asset class that we are going to post is a minerals and royalties. And so those are don’t bear any capex at all. You just receive a check based on the production on the real estate that you own a piece of. And so they are popular with, you know, family offices and high net worth investors and people that have a longer term time horizon with a couple of big exceptions. You typically don’t see a lot of private equity owners of the mineral space. You you do see a lot of interest in that among high netw worth and and family offices, but it is a non-capexbearing, you know, non non- capital loadbearing asset. So it’s it’s at the the least risky end of the riskreward spectrum and we’ll be posting some of those deals as well. We just haven’t done that yet. Love it, Chip. Like great description of it because that’s where I was going to go next is like how do you break it down for somebody still kind of getting into the understanding the oil and gas investing space? And I was going to also ask how do you understand risk? But I think you nailed it for those different risk classes depending on what you want to do. And if you guys aren’t connecting the dots and some of you guys are used to real estate syndications or real estate funds, it’s very similar, right? They’re able to go out there and they’re doing like we talk about with our fund all the time. Like you don’t have to be the one who finds goes out and finds that house to flip or goes out and finds that big multif family property or the one who manages contractors or the one who has to deal with the tenants, right? I’m pretty sure you guys are not calling your limited partners when there’s an issue, especially I mean sounds like you you guys aren’t operating, you guys are partnering or helping fund the operators, but but they’re they’re very passive, which I think people really appreciate and they get exposure to another industry for doing that. But anyway, great summary. Anything else you guys want to add? Because the next phase I’m going to go into is talking about sort of the structure in terms of raising capital because I know a lot of people listen to this are capital raisers. No, I think that’s covered the uh the key points. Adrian, anything else? No, I I think this has been a really good overview. Okay, perfect. Okay, so now I got to ask it from the other side of the coin for a lot of the pieces. A lot of our listeners are raising capital for a real estate deal or maybe they’re they are raising money to go drill a well or who knows, lots of different opportunities, lots of ways to raise or maybe they’re just capital allocators and they’re just gathering other people’s money and then going finding the other operators across multiple industries. So you guys mentioned a couple things you highlighted was that indiv let’s see you guys said you invest in that actual deal right they’re SPVS so they’re not it’s not necessarily a blind fund and a bunch of different deals so you guys so the way you’re structured specifically per deal and then can you guys do as many deals as you need? I’d love to dive into that. Yeah, we it’s uh I think what we’re doing now in terms of the development of the platform like we’re starting with smaller deals and then ratcheting into larger deals because finding larger deals is not really a problem for us. It’s some something that Adrian’s uh particularly good at. But but as a practical matter before our platform, we need to be around a little longer. We need to build up, you know, a more a bigger following, a greater number of investors so that when we do post an opportunity, it gets soaked up, you know, faster because the the less time it’s on there, the better for us, meaning we can go and then work on the next. And so that’s our goal is to reach a sort of critical level of investors where that once we put something on the site, it gets taken up fairly soon and then we can move on to the next one. If you look at the timing, the first trial investment that we did, we just launched the platform in the fourth quarter of last year. We put a trial investment on there that was $40,000. So small deal. We didn’t open it to the public, but we invited 90 friends and industry contacts. 52 of those opened accounts. 38 of those invested. So we were super happy with the level of participation. And we capped everybody at $1,000 because the main point wasn’t the money. It was to get we we needed to test our tech. We needed to test our interface with the blockchain and we wanted to get feedback from the users of our platform. Um and so we got tremendous feedback and so we felt very encouraged. So we closed that deal. We issued their tokens and then we listed another one which was an opportunity in the Perian in in Midland County. When you’re an oil and gas person, the very first thing you do when you open it up is you look at the map and you look at the quote address, you know, where is it located and everybody if it says Midland County, everyone will slow down long enough to read what that opportunity is. So Adrian found us one in Midland County. We posted that. That was a $90,000 deal and that was subscribed within about two and a half weeks and the range of investment on that one was $500 to $20,000. And so the average there was $6,000 the average investment, but the range was $500 to 20,000. And so then we ratcheted it up more. So we have two live deals on there now. One of them is uh 460,000 total that we’re raising. The other’s only 50, but it’s kind of a test case for PDPs because we want to see, you know, we we don’t assume that everyone has the same risk appetite that we do and we want to put it out there and kind of see what everybody’s hungry for. and then we’ll we’ll see how long it takes to get those uh subscribed. But we think what you’ll see over time is an increase in the size of the deals and overall a shortening of the average duration that the offerings are open. That’s what we hope to see and that’s our goal. I’ll just also add, you know, some some folks may have a view on natural gas and say, “Hey, I think data centers and AI and, you know, some of these issues, you know, some of this new expansion around the grid is a good way, you know, I think natural gas might be a good way to maybe invest right now.

” So, you know, we have we have users who may just want natural gas deals. And so, you know, you you’ll notice not every well is just oil or just gas. Some have, you know, all three commodity streams. Some have, you know, more of the other or or none of the other. And so, you know, we’re trying to put some diversity of commodity on there as well. For example, the deal in Ohio that’s live right now, that’s that’s dry gas in Appalachia. You know, the deal in Millland County that there’s definitely you not just oil, but it’s that’s an oil well. So, you know, I think you’ll see people who, you know, what we want to do in the next, you know, year or so is is allow folks to really build a portfolio and say, “Hey, I have, you know, x number of dollars. I have, you know, these minerals, this what we call nonop, which is when you’re just investing in a new drilling well, which Chip mentioned, that has those tax benefits we discussed. I have oil in the Peran. I have gas in the Hanesville and let people kind of cut and slice and dice the portfolio around their specific riskreward profile as well. Yeah. And added to that, do you feel like there’s a reason why I mean, not saying this is on your guys’ road map, but you could have it sounds like you guys have got PDP to to like the new new new drills to all the way down to like royalties. Do you feel like you guys could do different other asset classes? Is do you have that optionality through your fund or is that so you’d have to create another PPM for that? Do you mean other than oil and gas? Yeah, even like say it was real estate or anything any other investments, alternative investments. Well, we we certainly know how to tokenize it. I mean mechanically and you know we know how to do that now from a technical perspective. Um I would say what you might see from us over time though is moving into you know energy generally instead of oil and gas. So I think we would certainly consider moving into you know tangential sectors that sort of fall under the energy umbrella that are a little bit closer to our expertise. But do we have the technical ability to show you how to tokenize one of your real estate deals? Sure. But we also don’t think of it as our edge to do real estate, quite frankly, because it’s uh I don’t know how to originate and manage a real estate deal. I would look to you, Casey, to to tell me how to do that. I I don’t know how to do that. And so, we don’t think of that as our edge, but do we do we know how to to Yeah, we can we can uh tokenize your your mother-in-law if you think she’s marketable and has value, but we know how to tokenize anything now. It’s kind of fun to know how to do that, but we don’t really also look to provide tokenization as a service to people in other other sectors. If that’s also why you’re asking, that’s not really part of our plan. There actually a lot of other people that can do that for you. Got it. Okay, cool. Well, keep going with that. I’d love to hear sort of the purpose. You guys mentioned that earlier that you’re going to touch on it. I always like to hear like whether it’s what brought you here to where you guys are going. Like what’s it all for? What keeps you guys motivated? Well, it’s kind it’s kind of fun to be a pioneer in a space. You don’t get a chance to do that very often in life. And so that’s I would say that’s one of the things that motivates us is the first off we see that we’re feeling a need. Like if it weren’t for that then it’s not worth it. Uh you can’t do it just for the intellectual challenge but we do like the challenge of trying to figure this out. Like that that really does motivate us. We don’t ma mind problems with hair on them and we’re trying to figure it out. You know, the other thing we’re doing over time, what you’ll see is the platform develops, but a lot of what we’re we’re doing is very usable in the context of decentralized finance. And so, don’t know how much of your audience would be familiar with that, but part of our business plan going forward is to figure out how to I think the way to say it at a high level is we’re here to bridge the gap between sort of cash flowing oil and gas assets and the onchain capital markets. If I was going to say it in one short sentence, that would be it. And we’re exploring a variety of different ways, you know, to bring those assets on chain. And you see that happening in real estate. It’s actually way more common in real estate than it is in oil and gas. As as you probably know, there there many more platforms out there trying to do it in real estate. It’s something that people feel like they can understand and wrap their heads around. Whether that’s right or wrong, I don’t know. You tell me. But a lot of tokenization. The first thing you saw tokenized though in terms of real world assets was treasuries and gold things that are very fungeable, you know, very all of them are kind of the same. And so unlike an oil and gas deal or a real estate deal where they’re all a little bit different, the place that tokenization started was among the more fungeable assets that are all the same. I mean, a a bar of gold is a bar of gold and a US treasury is a US treasury. It’s a certain duration, a certain rate. You can get a market price for it. It’s very easy to understand. And so that’s where tokenization started, but it’s now moving to what the digital asset people call RWAs or real world assets. So it’s starting to branch now into not just financial products, but you know the things that would hurt dropped on your foot. Yeah, that makes sense. So, and just like technically speaking, one one more technical and we’ll stay and we’ll kind of wrap up again with sort of the bigger purpose is and this might be way too technical, but give us the simplified version of how you actually attribute that token you mentioned to like different is it just tied to a share and like sort of what security how does that how does all work on the maybe the back end of that? Adrian, you want to take that? Uh, sure. Yes. So when you buy a a token, it represents your equity interest in that SPV. And so the blockchain does help us, you know, sort of manage what we’ve called sort of the digital cap table. Like that represents it’s no different than a stock certificate or anything else you would have physically. You know, your your interest is basically just represented on the blockchain based off the number of tokens you acquire when the offering is open. And that percentage will indicate, you know, how much revenue you’ll get when we start making distributions. Um we’re really excited. We’re about to make actually our first distribution on the first project from end of last year, you know, and it’s kind of, you know, exciting to to, as Chip said, be a pioneer. We’re the first people to ever ever do this. And so I’m telling people who are investors, you might get 10 bucks or 50 bucks depending on what you put in because it was such a small offering, you know, but it is the first time that, you know, anyone has ever gotten a non-op, you know, revenue check through the blockchain. It’s it’s it’s very exciting. Got it. And then I can’t believe I didn’t ask this earlier. Could people sell their tokens to other people or does that have to be approved by you guys? That has to be approved by our guys by us because they are, you know, security tokens issued under in compliance with regggd and so they are uh transfer restricted. So if you need to sell or want to sell, you can let us know and then we can potentially buy it back or we can line you up with another investor that wants more. They’re already in the deal and they may want more of it. So there’s li limited transferability, but there’s not a market or a secondary exchange for those assets. So the thing I’d say though is that you do get, you know, we’re now starting this process with the ones we’ve already closed, but you’ll get either monthly or quarterly distributions depending on the asset. So you are getting some partial liquidity for it in the form of distributions, but selling your token itself is there’s not a ready market for it. It’s not a click the button and it’s sold kind of thing. Got it. Okay. And then just making sure I fully wrap my head around and I’m sure our audience will be too versus so right now you have the token. It all makes sense how it’s tokenized. Alternatively, just looking at it very simply, you could do the same thing. In theory, I could go invest $500 with you guys. I’d have $500 of cash in the account with you guys. Like call it a bro and compare it to somebody’s brokerage account. That’s maybe the easiest way to think about it. I go put $500 in Shell’s stock or Exxon or whatever and you put it in to that account. you could see it on your Fidelity or your stock or where wherever whatever brokerage you use, you could do the same thing. But I guess now what we’re saying is you guys can now do it in a smaller operator, get direct access to the assets like you mentioned. But any other sort of key differences between it being tokenized versus even if someone else just brought it to you guys in your fund, you doing exactly the same strategy, the same same operation, the same offering. Is there any difference between them putting in the cash and the token? Just differentiating that. Well, the differentiator is is liquidity. I mean, if you’re putting it into your brokerage account and buying Shell stock, you know, you can buy or sell Shell with the click of a button, but you can’t do that with the tokens in our account. But what what you are getting is direct exposure to an asset that you know produces those distributions without any of the influences of the general market like you’re seeing this week. in the overall market’s pretty weak given everything that’s that’s going on except in oil prices which look a little bit bullish these days. But in any event, you know, the overall you’re investing in something that’s direct asset exposure. If you invest in a public stock, that’s a different kind of exposure. You there there’s a market component to it that has nothing to do with the actual stock you own. like the the mindset of the market uh and the es and flows of the public market can affect your your valuation on any given day. But when you’re investing in an asset level, that’s that’s not really the case. So you’re you’re really you you are affected by commodity prices, let’s say in our in our case, but you’re not affected by the mood of the overall market when you’re investing in an asset level. Makes sense. Yeah. Yeah. Totally compared it to like just the stock market. I love it. I mean, same reason why people would potentially go partner with somebody on a real estate deal versus Yeah, you could go put it in a REIT or something else in the market which has a lot more volatility and less control, right? Got it. Cool. I mean, and and anything to add on just the key difference between what is I guess the difference between if I put in five $500 of cash with you guys? I know that’s not the way you’ve set up, but say somebody was set up similar to you where they put in $500 and it was cash and I got distributions off that versus the token. I’m just understanding that difference. Oh, I see. So, we don’t right now take deposits of cash and pay you interest like a bank. Like, we don’t if that’s what you’re what you’re asking. If you’re if your cash is sitting there, it’s it’s not earning. Now, we’re kind of like a lot of other people in the digital asset space waiting to see how the current legislation that’s being debated in Washington pans out because what you’re asking, I think, Casey, is the hot point right now between traditional banks and sort of onchain finance because stable coins, these dollar equivalent digital dollars basically is that what I call them is that, you know, they are very popular right now and you’re starting to see the increasing use of stable coins and sort of onchain payment rails because you see the New York Stock Exchange just partnered with Securitize to to work on the tokenization of stocks on the New York Stock Exchange. The NASDAQ has said it’s going to do the same thing. But those are stocks. If we’re talking about payments, you know, Western Union CEO just said this week that they are going to stable coins because if you think about it, you know, if you’re trying to send money back to a relative in another country and you go to Western Union and you’re trying to send a wire, there’s a cost and a time and a hassle component to that which is not there. If you’re if you’re authorizing Western Union to pay, you deposit your paycheck or whatever into Western Union, they give you the credit. They can send your ta stable coin virtually costless and within a second or two to your relative wherever they may be that you’re sending that money to. So, you know, Western Union has said, “We’re moving to stable coins. ” You you’ve got Visa, you got Mastercard, you got PayPal, you got Vinmo. All of them working on stable coin payment rails because they see the future and they see what’s coming. What you’re get asking, maybe not even without realizing it, is that there’s a little over 300 billion of stable coins on chains on chain right now. And so those stable coins, a lot of them, if they’re just being held and they’re idle, you know, they want to be earning interest. So, one of the things that we’re going to be creating is a product that will in fact allow you to do that, you know, while you’re waiting. So, if you’re holding I would say not the cash you mentioned because we don’t hold cash like a bank. You we’d have to hold it as USDC, but we’re going to provide you with options of things that you can do, you know, with that stable coin while it’s on our site. And that’s something you’ll see as our business grows and as we add more features to the uh to the platform. But you see that even on like Coinbase right now like you can you can deposit your idol stable coins and earn the treasury rate you know four to four and a half% let’s say. And then if you want to ratchet up your risk and participate in other yield producing programs and you’re an accredited investor, then you can sign up and do that and kind of ratchet up your yield to more in the 8% range. And so one of the things we’ll be doing is offering some of those options to investors. Yes. Okay. Got it. Now that answered it. And I think the bigger for people who are less not doing as much of the the UDC or dealing with coins, right? I think it’s also the sentiment of like confidence in digital currency. I guess it was maybe you would use different words than that, but the confidence in that versus just keeping all their money in cash in US dollars, right? Being able to convert that because that’s what I just don’t understand like most funds are probably set up to where people just take their cash from their bank account and they wire it to the fund or the investor and then that’s how they transact. But I guess the benefit here is it’s a coin. they feel it’s easily more easily transferable because that’s the other question is how easy you can I know I just threw two well when you’re when you’re investing with us initially Casey let me let me clear something up so when you get to the you you’ve signed your subscription doc and you get to the payment page you can pay us either by a wire transfer from your bank just like any other wire transfer you can pay by a we’re integrated with Stripe you can pay us that way without ever leaving your screen you can connect your bank account in a confidential, secure way that is done outside of our site. It doesn’t run through our site. It runs through Stripe and then Stripe pays us after they take out their little fee. Or you can pay us with a stable coin if you want to. Now, a minority of people do that. Most about 40% of the people use AC because it’s easy. They can do it right there on screen without ever leaving our site. Another third probably use uh wire transfer. and then a small percentage actually pay us with the stable coin. But you’ve got three payment options. So you you don’t if you don’t already have a a mobile wallet set up or you don’t have a Coinbase or a Kraken account, you don’t need to go do that in order to pay us. So if that’s what you were saying, I just wanted to be clear. You don’t have to do that. You you can pay us in all the old school ways that you’re used to. Got it. Yeah. So you can do both. So people already have the digital coins, they can come that way. And then are you guys finding more people like so you mentioned you pay them in coins which they assume same process they could convert that to cash out of their account or are you finding people want to keep the coins and go pay for other things or transfer them like you said Western Union more people are going getting on board with these coins they just like keeping the coins I guess in their digital wallet and using that instead of a bank account huh we’re we’re about to find out u so as I mentioned earlier we’re about to make our first distribution this is a brand new platform and you know the goal will be hey there you know we send back USDC and and there’s two other offerings open right now. You know, roll the money into something else that’s open if you like it, but there’s no restriction. You know, if you get your distribution and you want to make it uh convert it to US dollars in your Chase account, you can do that instantaneously for no service charge. It’s completely up to the individual investor on what they want to do once they have that capital. But, you know, we’re we’re we’re hopeful that we have and I feel pressure, frankly, to have a menu of deals available for people. So as we start to make more regular distributions, you know, you can reinvest your returns and, you know, sort of see some some growth alongside the platform. Yeah, I love it. Yeah, that’s what we’re trying to do. And we want people to stay within our ecosystem and as we grow the platform, they’ll there’ll be more options, not just in terms of deals, but in terms of how you manage what’s in your account. So, but it’s it’s very uh just just so you’ll you’ll know and your listeners will know if you have a Coinbase or Kraken account, you can switch back and forth between traditional US dollars and digital dollars and a costless one button click one-click kind of thing because, you know, they are the on-ramps to the digital world and it’s a very they want to facilitate that like they have no incentive to charge for that. So it’s a it is a costless spreadless transaction. You get you get one digital dollar for one old school US dollar. Yeah. Oh man. Yeah. Like you said that’s where where the world going where the world’s going lots of the writings on the wall. So last technical one because it keep they keep coming is the the small amounts right. It must be is it more of the way you’ve tokenized them? But I’m just curious from like being because most other offerings and any sort of accredited offering are not allowing $500 and I would assume a lot of times that’s because of the administrative part of like how do we keep track of a 100 people or maybe a thousand people? I’d even be curious like is there a cap if it’s let’s assuming this is accredited investing fund because I know that’s the difference there too but if they’re all accredited investors is there a cap on how many people you can have and how do you manage that many amount of investors and money you could when it got really large like if you’re doing an offering to both accredited and nonacredited you know you can let in up to 35 nonacredited and so you know we have that numerical cat built into our platform for legal reasons so if if the nonacrediteds in one of those offerings reach that number. No additional nonacredited would be allowed to invest. So we have those restrictions built in. But if you’re doing accredited only, we actually don’t have a cap built in right now because we don’t need it. But I think as we got much if you got into a really big offering and you’re talking about a couple thousand investors, then we’d have to start thinking about those numerical limits. But for right now, that’s not an issue for us. We want to have that problem in the future, Casey. But we don’t we don’t we don’t have it yet. Got it. But I think you guys said it. It’s like the cap table. You’ve got all the software that’s Yeah, I guess it’s just really clearly defined what they’re investing in. It’s a single offering and they come into it and yeah, you’ve got the cap table. Yeah, it makes perfect sense, right? You go make x amount of money in the quarter, you’ve got that much to distribute. You push to the cap table and then it just you have whether you have five investors or 500, it’s just going to push it all out. It it took it took some time and money and effort to set it up, but once that’s done, it’s the simplest making of a distribution that we’ve ever done. I mean, it it really, you know, you just make sure that the USDC you need for the distribution is in the wallet that we have attached to each asset and then we literally just hit send and within seconds it’s in your wallet. So, we’re not paying wire transfer costs. We don’t have to go to the bank. We don’t have to sign things. We don’t have to wait a day. you know, it it’s just it’s fast and cheap and awesome and, you know, we we think people are going to love it. I I’ll also just add, Casey, on the small dollar amounts, you know, I made my first sort of personal investment into another tokenization platform about 15 or 16 months ago, and it was my first time doing it and it was in a solar plant, you know, in somewhere in Texas. And to be honest, I was I was new to it. And I’ve invested in, you know, Bitcoin and other things for several years, but it was my first time doing something new. And I think it’s, you know, we do have to remember we are the first people to do this. This is brand new. You know, there’s not a hundred other companies doing it. And and most of the people that are signing up here have, you know, maybe never invested in oil and gas and have definitely maybe never even used a smart wallet or invested on Coinbase, you know, and so, you know, I think having a lower just capital barrier to entry gives people comfort. What we’re already starting to see now that we’ve closed two deals and have two other live is those guys who are like, “Man, I’ll throw a hundred bucks in or now, hey, I’ll I’ll throw 2500 bucks in or 5,000 bucks in. ” Like, you know, as a small example, I think we need to let people kind of ease into not just directing directly investing oil and gas assets, but also investing in these tokenization platforms that are now popping up from, you know, Mickey Mel baseball cards to wine collections to classic car collections there. You can literally get into any asset class now pretty much uh given the technology but at the same time it is still very new. Wow. All right. I lied. One last technical one just because you know I know you guys know it in from a legal structure on the entity side or their asset side. You mentioned their different SPVS. So I assume you have some sort of structure where you have maybe the offering or I call it like the parent LLC up top and then are they I guess they’re single SPVS. Are those like different LLC’s that you got to set up each time to go acquire an asset or is it just I’m just curious that structure on the B like call it on the SPV level. Yeah, the way we’re structured now there’s an SPV for every asset. Okay. And so it’s a singlepurpose SPV that owns a single asset or defined group of assets. And the reason for setting it up that way, you know, we do get this question every now and then is that you don’t invest people directly into the underlying asset because it’s an interest in real estate. And so if ever you went to sell it, there’s a public filing you would have to make. And most people, we know how to do that. It’s routine for us, but most people don’t know how to do that. So every time there’s a transfer, you’d have to be doing something on the public record. If you remove it one step through an SPV, and this is the way tokenization is typically done, you’re tokenizing the equity interest in the SPV that owns the asset so that you don’t get into any of the transactional cost and friction in the real world of making transfers. Got it. Okay, that connected a bunch of dots right there. Very relevant for what you’re doing. That’s a really good question. The real estate front if you think about it. You know, if every time there was a transfer to, let’s say you raised a fund from a hundred investors to do one of your your your real estate properties, you know, think about that. You’d have to you’d have a hundred deeds instead of one for the interest in that real estate asset. And then if they wanted to transfer, that’s another one. Yep. So that that’s that’s tough on you and them. Makes sense. Well, great. Well, good. You guys nailed it. Cool. I’ll let you guys kind of wrap it. Well, I mean, I’ll wrap it up in a second, but anything else you guys wanted to share about what you’re doing, where you’re going, what you’re most excited about heading out of this? We’re super excited about what we’re doing, and we think it really works to the benefit of investors. You know, we we’ve got the equity products that are out there now, and we’re growing a following in those, but we’re also going to do some pretty cool things in decentralized finance within the next uh few months. So there’s a lot of sort of upside growth in the business that motivates us and look forward to helping people get exposure to to what we know how to do. Yeah. You know, I’ll just add Casey, you know, I I’ve been working in the oil and gas space in different capacities now for I guess 15 or 16 years and in some cases again leasing a million acres in Ohio to managing a billion dollar acquisition for a public company in the Perian. We you know to working with ship and managing you know several hundred million dollars of assets. I was never able to buy my own sort of first personal Adrian MSAS sort of over here deal in oil and gas until two or three years ago. It’s really hard even for people who are in oil and gas to find those deals to do all the work related to those deals like that I mentioned at the front end of the call the engineering work the accounting work the documentation and then the check sizes are so big and so what I’ll just kind of you know say is I got the first revenue check and it’s like this is you know in oil and gas it’s called mailbox money you you get this check and it it’s awesome you’re on Christmas you spring break whatever we were just actually on spring break and I came back open my my mailbox and had two checks in there. Not a lot of money, but it’s just it’s addicting. It’s fun to invest in something that gives monthly distributions in cash. You could put in your bank account, go do another deal. It is very hard to do that if you’re not, you know, in the space doing it. And even for people who are in the space, it’s incredibly difficult to do this. And so I I get really excited about, you know, these specific deals. I’m personally invested in every deal on the platform. I’m going to continue to do that, you know, because these are things I I want for myself and for my own benefit uh as an individual. So, I’m really excited that we’ve built something that we use that we like that also solves the problem of making, you know, these deals accessible to people that, you know, to be honest, it’s just not accessible right now unless you’re potentially looking at deals that that I wouldn’t personally want to want to be a part of. And so, we’re excited to have more people log on and make accounts. And you know, we just invite people to, you know, sign up for the newsletter, just make an account, check it out, and and if you have questions, you know, we’re still a startup, so customer service is Chip and Adrian in many of these cases. So, it might take us a day or two to get back to an email or a text, but we will get back to you. And, you know, we’re glad to do phone calls, one-on ones, do whatever it takes to make sure people uh with any check size understand what we’re doing and why we’re trying to do it. Love it, man. Uh well, that was a perfect way to wrap it up. I’ll make sure, guys, I share your guys’s link for somebody to go create an account. Like you guys said, get on your newsletter, learn more all about it. Like I know I talked to Chip. It’s super simple. You can just go I’ve actually done mine guys. You just go online, you set it all up, set up the account, you can go connect your you can go through your accreditation, go through all the steps, but if all else actually is there a step, Chip, just to before you get accredited, just go create an account so you can see what deals and stuff is coming down the pipeline. No, you have to sort of finish the process just it’s for SEC reasons. Okay. And so that’s that’s the only part that’s a little bit of a pain. If you’re establishing accredititation, you have to you have to do that, but it’s just part of the we have to require it. And so you do need to do that before you can, you know, view the opportunities. Okay. Well, that’s good to know. So that’s a great way to set it up. I’ll share the link with you guys, but I think Adrian just summed it up great. All right. It’s the mailbox money. We talk about that in real estate. The same that we say the same thing, right? There’s nothing better. Everybody gets into real estate for that mailbox money. So hopefully today you guess that we’ve gotten really technical on how you do it. But if I’ll also help our listeners today tune in be like, “Wow, I didn’t realize that I could get that mailbox money from a different asset direct like pretty much directly to the operators, the people running the assets, the people managing it, the people with years of experience. Really cool stuff today, guys. I’ve learned a lot and I just wanted to thank you guys again for coming on. ” Well, can’t thank you enough for inviting us, uh, Casey, and uh, appreciate your interest in what we’re doing. Thanks so much, Casey. really enjoy it. You bet. Likewise. We’ll have you guys back soon.