19 Nov Fulcrum Pursues Optimal Risk-Adjusted Returns
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Investors looking to put capital to work in the energy space have several structures available to them.
For an explanation of a few common structures, you can view our overview here.
At Fulcrum Energy Capital Funds, our team of experts has reviewed the options extensively, and we believe that the best risk-adjusted returns in today’s markets are available for investors in producing operated assets. Producing assets provide predictable cash flow, and operating the assets gives Fulcrum and its portfolio companies the opportunity to control the timing of future wells.
Perhaps the most compelling aspect of operated assets, however, is the favorable valuation at which asset can be purchased today, particularly compared to other structures such as minerals. Many quality assets can be acquired from distressed and over-leveraged sellers, creating compelling opportunities for firms with the knowledge to operate them.
While operated assets have a higher risk than mineral assets given their cost component, the returns are over two-times higher and valuations are less than half of current multiples being paid for minerals.
To learn more about the market opportunity and why Fulcrum believes the most attractive investment opportunities are in operated working interest, view our overview of asset structures here.