Transaction Marks Fund’s First Expansion into the Eagle Ford Basin
Calgary, AB - Invico Capital Corporation (“Invico”), a Canadian investment fund management firm providing alternative investing and financing solutions in North America, announced today that it had closed an oil and gas royalty package in Texas’ Eagle Ford Basin through its alternative investment fund, Invico Diversified Income Fund (“IDIF” or “the Fund”).
The asset was purchased through the Fund’s U.S.-based subsidiary company, Invico Energy U.S.A., and is expected to add 320 boe/d of royalty production from 49 wells, effective November 2023. The transaction, which is 66% oil and liquids-weighted, marks IDIF’s first Texas-based upstream oil and gas acquisition and serves as a high-quality addition to the Fund’s existing land and royalty position. The package has a concentrated position in the core of the Eagle Ford Basin across 7,180 gross acres (~1,090 net royalty acres) and an average royalty rate of ~1.7%. An additional ~210 boe/d is expected in 2024 from 14 wells, which are currently in progress, and a significant multi-year inventory with ~90 gross future drilling locations has been identified, which will drive substantial growth in royalty production and cash flow. Further, the Fund has purchased a royalty interest on these lands, so the new locations do not require any additional capital outlay.
“This opportunity was very attractive to Invico, given its desirable mix of short- and medium-term growth from upside drilling locations coupled with instantaneous production and cash flow,” said Jason Brooks, President of Invico Capital Corporation. “After years of reviewing opportunities across Invico’s core focus areas, concluding this transaction in Texas is a natural fit for us and leverages the Firm’s knowledge with our lending investments in Texas since 2017 while further diversifying the Fund’s North American energy business. The Eagle Ford acquisition involves well-known and active operators and has multiple wells currently in various stages of development that will significantly contribute to the bottom line.”
Over the past two years, Invico has successfully expanded its non-operated and royalty business and has more than quadrupled production through organic growth and acquisitions to over 3,200 boe/d.
Forward-Looking Statements
Certain statements or information contained above constitute “forward-looking statements” within the meaning of that phrase under applicable Canadian securities laws. Any statements that express, or involve discussions as to, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, through the words or phrases such as “will likely result”, “are expected to”, “expects”, “does not expect”, “anticipates”, “does not anticipate”, “believe”, “continue”, “estimate”, “intend”, “plan”, “potential”, “predict”, “project”, “seek” or other similar words) are not statements of historical fact and may be forward-looking statements. Forward-looking statements involve Invico Diversified Income Administration Ltd.’s (the “Administrator”) and Invico Capital Corporation’s (the “Portfolio Manager”) internal projections, estimates or beliefs concerning, among other things, future growth, results of operations, investment opportunities, future expenditures, plans for and results of investments, portfolio results, business prospects and opportunities. Although the Administrator and the Portfolio Manager believe that the expectations, estimates and projections reflected in the forward-looking statements are reasonable, they cannot guarantee future results, levels of activity, performance or achievement since such expectations are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies which could cause the Fund’s actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Fund. Because of the risks, uncertainties and assumptions contained herein and in the Offering Memorandum, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits the Fund will derive therefrom. Prospective investors should not place undue reliance on forward-looking statements.
Forward-looking statements contained in this document include, but are not limited to, statements with respect to: the use of proceeds of the offering; the business to be conducted by the Fund and the Partnership; timing and payment of distributions; payment of fees and expenses; the Fund’s investment objectives and investment strategies; the Partnership’s active investment approach; the degree of control exerted over management of investee companies by the Partnership; anticipated investments and investment pipeline; the assets to be held by the Partnership; the process by which the Partnership determines whether or not to make an investment; the Partnership’s expected capital investments and objectives with respect to Invico Energy USA and Invico Energy; treatment under governmental regulatory regimes and tax laws; financial and business prospects and financial outlook; the ability of the Fund and the Partnership to redeem units; types of portfolio securities and results of investments, the timing thereof and the methods of funding; anticipated terms of the Partnership’s lending arrangements; the Partnership’s strategies to manage defaults; objectives with respect to “equity yield investments”; and prospects and targets with respect to the offering.