Investing in oil and gas provides unique tax benefits through Intangible Drilling Costs (IDC) and Tangible Drilling Costs (TDC).

Intangible Drilling Costs (IDC) covers non-salvageable expenses like labor, site preparation, and drilling fluids—often amounting to 70-80% of total drilling costs. These expenses are 100% deductible in the year incurred, offering immediate tax relief.

Tangible Drilling Costs (TDC) cover expenses for equipment and other physical assets used in oil and gas production, such as rigs, wellheads, and casing. Thanks to accelerated depreciation rules, up to 60% of TDC can often be deducted in the first year, with the remaining balance depreciated over a 7-year schedule.

If we modeled a $100,000 investment, potential write offs may look like this across different projects:

New Development Projects: these requires more new drilling, labor, and services resulting in higher IDC.

- IDCs: $85,000 (85%) = $85,000 first year deduction.

- TDC's $15,000 (15%) = $9,000 bonus deduction & $875 regular depreciation.

Total First Year Deduction: $94,857. (95%)

Rework / Recompletion Projects: similar to development, but slightly lower IDC ratio.

- IDCs: $80,000 (80%) = $80,000 first year deduction.

- TDC's $20,000 (20%) = $12,000 bonus deduction & $1,143 regular depreciation.

Total First Year Deduction: $93,143. (93%)

Existing Production Projects: These have lower IDC percentages because of existing infrastructure:

- IDCs: $60,000 (60%) = $60,000 first-year deduction

- TDCs: $40,000 (40%) = $24,000 bonus depreciation + $2,286 regular depreciation.

Total First Year Deduction: $86,286 (86%)

The Energy Flex Fund is structured to allow investors to partner alongside industry experts in Oil & Gas opportunities with more transparency, control over capital, and an easier ability to diversify than possible in traditional Oil & Gas structures.

Investors participate by buying units into the fund, which are then allocated across a variety of projects of their choosing.

This provides the flexibility to build a custom portfolio diversified across projects that best meet their investment goals and risk tolerance.

There are many forms of investing into Oil & Gas that you can participate in within the Energy Flex Fund.

- Existing production: these opportunities have current Oil & Gas production, and are a more conservative way to buy into existing cashflow.

- Equipment: another conservative opportunity to buy into the Oil & Gas equipment itself that is used on sites to see potential cashflow from the service provided, regardless of well performance.

- Reworks & recompletions: a more moderate opportunity with higher potential returns to invest into wells that had production but are offline and need some labor to return to production.

- New drills: a more speculative opportunity with substantially high potential returns to develop the land and drill a brand new well.

It's recommended to diversify across several wells and/or opportunities to mitigate risk and maximize the chance of both return of and on investment.

We target assets with a potential 1%-2% monthly rate of return that may have opportunity for further development and potential increase in return.

Some of our partners in Q3 of 2024 received over a 14% distribution with as high as a 6% return in a single month on a project initially targeting a 23% ARR.

More recently, some of our partners received a 2% distribution on a new project that is partially completed targeting a 27% ARR, suggesting the potential for a higher-than-expected return.

Not all projects exceed projections, but our acquisition strategy is geared toward projects targeting potential returns of 1%-2% a month in properties that may have further upside and potential return with additional development.

We are not the Oil & Gas company selling you a deal. We are investors ourselves vetting opportunities and deploying our own capital into them.

We simply make the projects we are actively participating in available to investors like you to partner with us in order to bridge the capital gap needed to complete the project.

This structure aligns incentives where both parties stand to profit on the performance of the asset itself, rather than the investor holding the entirety of the fiscal risk as is often the case in traditional Oil & Gas structures.