Alan Kurtz
Calgary, AB (CAN)
Role(s):
C-Level Executive (CEO, CFO, etc.)
MAGNATE HOLDINGS INC
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Startup
Location:
Calgary
Industry:
Energy
Year Founded:
2001
Number Employees:
1-10 people
Business Stage:
Growth (not profitable)
Entity Type:
Incorporated Outside United States
Description:
As you are likely aware, there are many uncertainties in the oil and gas market in the world and in Canada. Currently cash is not all that abundant. In fact, many oil and gas companies are in great need of being rescued from the banks and so on. I am seeking private equity investors / groups / partners to venture with me to look at this industry in the same way the domestic industry views their business models. If the investor is seeking a long term (5 to 10 year) great ROI, then that is quite possible by getting involved now. We cannot currently rely on the public markets or banks. Larger oil and gas companies still can simply because of their size, but the juniors are fighting. This opens a great opportunity for private equity investors seeking relatively safe investment conditions, stable government, etc. while being able to gain substantial opportunities in the oil and gas industry in Canada.
On the junior oil and gas side, there are three models or styles of opportunities that I see are current and prevalent. We can buy into several junior oil and gas companies from investments of $3.0 Million up to (and in some cases exceeding) $50.0 Million.
There are many great opportunities that can be exploited in various ways. The first model is aimed at and partnering with an oil & gas company. We buy in with the investment for a percentage of the corporation for a future exit (say within 3-5 years; depending on the relationship and confidence). This is viewed based on current economics, developmental plans and operations.
The second model is aimed at acquiring and / or packaging several junior companies and / or simply purchasing selected assets. Depending on the our group, we may want to operate ourselves (bringing in the right expertise or utilizing the skill-sets from the acquisitions). We would create an oil & gas company NEWCO or NEWCO JV. Once the assets are contracted into the deal, funds will be invested in order to complete the purchase. Many of these companies are have currently devalued assets. We come to them with cash and negotiate the best deal. The pressure constraint on many junior oil and gas companies is purely due to lack of access to capital, not from lack of expertise or property. All of this can be developed for more lucrative commodities like liquid rich natural gas or oil. In the near future, as the NEWCO grows in asset value and developmental growth, the capital markets will stabilize and turn back around to favour Canadian oil and gas companies. At that time the NEWCO can elect to take the company public, etc., etc..
I am directly involved with many of these junior oil and gas companies and ultimately function as the deal make,and can deliver excellent valued oil and gas companies currently constrained. As you may also be aware, there are several Asian companies currently exploiting and looking to exploit these opportunities, but not all junior oil and gas companies are desperate for a fire sale. The opportunity is now for participating in what I see as conservatively a 3-5 year gestation period that will yield excellent ROR’s.