1. Minerals & Royalties, an inefficient market May 2019
STRICTLY PRIVATE AND CONFIDENTIAL

2. Disclaimer
This presentation does not constitute or provide any advice of any kind, nor is it a representation of any policy or position of the presenter or any entity that is related to the presenter. This presentation is solely for general informational purposes. Examples provided in this presentation are for illustration and education only, and the fact situations in those examples are unique and complex. Any reference to a particular private company, public company, security, investment or asset is not an endorsement of any kind—it is purely for educational purposes. You should not make any decision in reliance on this presentation—instead, before engaging in any transaction you should seek out and rely on qualified advice from the appropriate legal, accounting, tax, investment, financial and oil and gas industry professionals. Any transaction in the oil and gas industry is inherently risky, and there is no guarantee of a profit, or for that matter any return of your investment. This presentation is not an offer to purchase or sale anything.
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3. Unlikely beginnings…
Executive Jet Sales
PetroLima, LLC forms EnCore Permian,
a joint venture with private equity sponsor, Castlelake, L.P.
Josh Lorenz
President & Co-founder
2001
2005
2009
2010
2014
2017
2019
Partners Co-found holding company, PetroLima, LLC
JD & Partners lease significant Permian position, exit to public E&P.
JD Smith
CEO & Co-founder
African Water Missions
Offshore Drilling & Completions
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4. Types of Investments
EnCore Permian capitalizes on an inefficient Oil & Gas asset market the three main property types.
Mineral & Royalty Interests
No drilling or operational costs
Lowest Risk
Non–Operated Leasehold
Proportionate share of drilling and operational costs, less control
Operated Leasehold
Larger scale
Higher risk, potentially higher returns
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5. EnCore Permian – Minerals outperform
xxxxxxxxxxxxxxxx x x x x x x x x x x x x x
Private equity has deployed an estimated 7 billion in the mineral space.
Public Mineral Companies market caps are approximately 11 billion, an estimated 2% of the total 500 billion dollar mineral asset market.
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6. EnCore Permian – Current Profit / Food Chain
Public Mineral Companies
Private Equity
Margin Capture x
Broker Network
Margin Capture x
Solid total return +
attractive dividends
Mineral Assets
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7. EnCore Permian – Go-Forward Strategy to Win
Public Mineral Companies
Exit / Profit Opportunity
Exit / Profit Opportunity
Self liquidating Portfolio
1031 Exchange
Direct Origination
Solid total return +
attractive dividends
Mineral Assets
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8. EnCore Permian – Mineral Model Comparison
Current Private Equity Model
Origination
Mailers
Direct Negotiation
Value Prop
Pay More $$$
Relationships, Speed to Close
Current Position
Higher Basis
Lower Basis
Liquidity Strategy
Dependent on Public Markets
Self-liquidate (hold) or Public Market
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9. EnCore Permian – Example Deal Evaluation - Overview
Asset Type: Royalty Interest
Acres: 320
Monthly Cash Flow: $/month
Price: Typically expressed as per royalty acre
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10. EnCore Permian – Example Deal Evaluation – Geologic
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11. EnCore Permian – Example Deal Evaluation – Engineering
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12. EnCore Permian – Example Deal Evaluation – Land
Title / Ownership Oil & Gas Lease Conveyance Document
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13. EnCore Permian – Example Deal Evaluation – Prospect code name
Give your prospect a proper name…
Chimichanga
Mr. Bonzo
Collie Flower
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14. EnCore Permian – Example Deal Evaluation – Operator Profile Cont.
Source: CNBC,
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