I was looking at the Kathis Fund packet and think I might invest in it. Looks like the first round is $5,250,000 to drill 8 wells.Split on revenue is 85% investor 15% Kathis until your receive your investment back. The industry standard is 75% investor 25% company.
Expected time frame to receive your money back is 2 years at $50 a barrel for oil. Oil is currently trading at $75. I assume each well will produce 20 barrels a day.
After investors recapture invested capital the remaining split become 60% investor 40% Kathis.
I also came across the fact that Kathis also keeps 10% of the funding for administration/operator cost.
So here are some assumptions on my part on revenue for NMEX based on Kathis alone with very conservative timelines.
2018
If the first round of funding closes for $5.25 million.
First well should be drilled in late July and will take 30 days to complete. I will make the assumption that they will complete a well every 2 months after this until the first 8 are complete. Since the first 4 are on the same lease they might drill back to back wells at some point. For these numbers I will assume
1 well produces 19 barrels a day at $50 and Kathis has 75% NRI.
So investors will get $605 and Kathis will get $106 until all investor money is paid back.
2018
$525,000 Kathis fund 10%
$12,720 4 months production SEPT. TO DEC 1 well 19 BOEPD
$6,360 2 months production NOV. to DEC 1 well 19 BOEPD
$544,080 revenue to Kathis lets say they waste it all and break even for the end of the year and clean up the little debt they have.
2019 is the year of the break out and why I'm holding long.
$3,000,000 Kathis Fund 2 for $30,000,000 25 wells
$114,000 3 wells 12 months production
$31,800 1 well 10 months production
$25,440 1 well 8 months production
$19,080 1 well 6 months production
$25,444 last 2 wells 4 months production first fund complete.
$3,215,764 with a 45,000,000 million share count
I made a lot of conservative projections and probably did more damage with this post than good. But this ladies and gentleman is why I am long till the end of 2019.
Everything is my opinion and if you have any questions with my core math let me know.
