standard royalty - a winning strategy

4425 E. Airport Freeway

Suite 310

Irving, TX 75062

Phone: 214-531-3820:

Setting the Standard In Domestic Oil and Gas Management

Standard Royalty Group

“the demand for efficient technology, expanding infrastructure, andincreased exploration in the coming decade will result in tremendous

opportunities within the energy sector.”

Standard Royalty Group, LLC is

located in Dallas, TX. Our Strategy

said very simply is to locate niche

segments of the oil and gas industry

that can provide asset value and cash

flow while adhering to our risk

adverse philosophy. Over the next

10-15 years there will be a frenzy of

activity within the E&P side of the

business. “There is a “shale boom”

going on globally right now and in this

new energy landscape North

America is the leader.” By 2016 U.S.

imports of foreign oil are expected to

be cut by as much as 41%. By 2020 it

is projected that the U.S. will surpass

Saudi Arabia as the largest oil

producer. Just as important, the U.S.

is expected to become the largest

net exporter of fossil fuels by 2030.

“This “frenzy” of activity to get

Strategy

resources out of the ground and into

the system will require substantial

expansion in midstream

infrastructure.” Our vision includes a

focus on finding opportunities within

this segment. We believe that the

right investments in this area can

provide significant returns while

maintaining a low-risk asset based

philosophy. A key to our success is a

forensic research approach. Our

strategy includes using these

expertise to create “branch”

portfolio’s of royalty and mineral

right interests. “We are excited

about the opportunities that exist in

areas that geologically match with

today’s technology.” These areas are

untouched by the technological

advances in drilling and completion

utilized elsewhere. Mineral and

Royalty investments in these areas in

the early stages can generate income

and provide substantial return upon

liquidation. We will also continually

evaluate the opportunities that exist

in EOR (enhanced oil recovery) and

other secondary recovery potential.

There are a large number of wells

that through time have been ignored

or abandoned, today's technology can

bring a second life to thousands of

wells. Local knowledge, extensive

research, and our forensic approach

can turn these old wells into good

investments. Standard Royalty Group

is committed to combining the

disciplined talents of it’s team with a

transparent view and successful

execution of it’s strategy.


Suite 310

Irving, TX 75062

Phone: 214-531-3820:

www.standardroyalty.com


Royalty & Mineral Rights

When an oil and gas company suspects that an area may be

productive for oil or gas it must gain the right to explore that

area further. These rights are referred to as mineral rights. A

lease contract is drawn up between the lessee and the owner

of the mineral rights. It is not uncommon for the owner of

mineral rights to differ from the surface rights owner. A

payment is typically made to the lessor at lease signing usually

referred to as a “signing bonus”. Mineral leases are typically

for a set period of time and can also come with specific rights

and restrictions regarding the activity that may take place.

The lessor typically receives a share in income from any oil or

gas production that exists, this “royalty payment” typically

holds the lease contract in place and can mean substantial

income over the life of the lease. Since the start of the “shale

boom” in 1999 the returns available for those willing to

invest early in mineral acquisition have been enormous.

There are numerous examples of minerals that were leased

for less than $1000 per acre that later were valued at 10

times that.

Standard Royalty Group will also focus on buying the rights to

the royalty interest in producing and non-producing assets.

Royalty Interest as mentioned prior receive a share in the

income from any oil or gas that is produced. Royalty Interest

owners do not share in any of the expenses of exploration,

operations, or development. This is a risk adverse approach

to sharing in the income of producing oil and gas properties

without sharing in the high cost of extraction. Royalty

Interests also receive unique tax treatment and can be

qualified as real property for 1031 Exchange situations.

A principle part of our strategy at Standard Royalty is to target opportunities that can generate an

immediate income stream, while providing a value at purchase and increased return with minimum

capital commitment. There are thousands of wells producing at low levels across our country that

have valuable proven reserves still in there coffers. These properties can be acquired at negotiated

discounts and brought back to life with relatively small capital investment .

Income Producing Properties

In area’s throughout the United States

there are wells producing at minimum

levels. These properties are sometimes

referred to as “stripper wells”. A large

number of these wells were completed

with less effective technology from 30 or

40 years ago. Many still were walked

away from or abandoned by operators

the went out of business or as a result of

a downturn in commodity prices.

Through state agency’s many of these

properties can be “adopted” at little or

no cost. Some can be purchased at steep

discounts from banks who have absorbed

them as collateral and many are on the

market by operators without the capital

budget to sustain them. A large number

of these opportunities exist in areas that

today are at the center of North

America’s new “energy boom”. “Going

into area’s where we have well known

geology, existing infrastructure and

today’s advancements in technology

make these very exciting propositions”.

New methods in EOR (enhanced oil

recovery) such as, CO 2 Injection,

water flooding, and others can

increase production from these wells

30-40% from current levels.

Comparatively this can be achieved

with relatively small capital

investment. These investments also

stand poised to benefit greatly if as

expected oil and natural gas prices

continue their rise in coming years.

“Targeting these proven reserves still

left in the ground matches our low-

risk philosophy. They start paying

from day one and with a well-

researched forensic approach can

keep paying for many day’s to come”.


Suite 310

Irving, TX 75062

Phone: 214-531-3820:



North America is currently seeing a

drilling boom. Massive advancements

have been made in finding sciences,

drilling techniques and the completion &

stimulation of the reservoir. 20 years

ago major new discoveries became

harder and harder to find if not

impossible in North America.

Independent operators working

domestically were forced to go back to

areas that had been thought to be

depleted or uneconomic. In that 20

years from then to today many fortunes

have been made. Today’s drilling still has

the inherent risk of exploration.

However it is undoubtedly easier to

achieve success today than 20 years ago.

A tremendous amount of historical data,

advancements in technology, and a very

active marketplace keep this area

growing. On the down side it is a very

capital intensive business with billions

spent every year waiting on return.

“To ensure the best possible chance for

success is expensive. We do not intend

to spend an overweighed amount of

capital here due to our risk philosophy.

We will however utilize our relationships

within the industry to target Joint Nulla vestibulum

Venture and other low-risk drilling

opportunities”.

This strategy will anchor on a forensic

research approach focused on leasing,

permitting, geological, and production

data. These operations can also add

value in increasing proven reserves on

assets we own through or royalty and

mineral right investments. Investments

made within our Drilling and Exploration

strategy will look to provide upside

potential and substantial cash flow into

the company and for it’s partners. In

addition, Intangible Drilling Cost (IDC’s)

deductions and other tax benefits are

attractive offsets against other activity.

Developement & Exploration

The midstream sector provides the

backbone of the nations energy

infrastructure, this includes treatment

& processing, storage, transportation,

and pipelines. As E&P companies

continue to drill at increasing rates

current infrastructure is reaching it’s

limit. This can already be seen in places

like Cushing, OK. Shippers wait in line

to transport product to refineries on

the Gulf Coast.

Thanks to the success of

unconventional plays such as the Eagle

Ford Shale or Niobrara Shale the

demand is constantly growing for new

infrastructure capable of handling

higher volumes and pressure. It is

projected that for every dollar spent

upstream 15 - 35 cents will be spent on

gathering, processing, and treatment

infrastructure. Currently, liquid rich

resources are in high demand. Natural

Gas Liquids (NGL) are products such

as ethane, propane, butane and natural

gasoline. These by-products of “wet

gas” can easily add $2 - $4 to the value

per mcf of natural gas. Additionally, an

expansion in the crude oil transmission

lines will provide alternatives to

trucking product from the tank

batteries on location to distant

injection points.

In combination with risk-management

strategies such as “produce or pay”

clauses these investments can provide

several benefits. “We are attracted by

the increasing asset value, predictable

cash flow and potential tax advantages.

We also like that it is typically a fee

based structure which fits with our

risk adverse strategy”. Based on

current drilling projections, strong

performance of wells, and additional

acreage commitments infrastructure

must expand. Standard Royalty plans

to collaborate with proven midstream

management teams on a variety of

opportunities within this segment. “In

between the wellhead and the refinery

many dollars are spent. We would like

to share in that residual stream”.


Suite 310

Irving, TX 75062

Phone: 214-531-3820:



Midstream Opportunities


Suite 310

Irving, TX 75062

Phone: 214-531-3820:

Setting the Standard In Domestic Oil and Gas Management


standard royalty - a winning strategy

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