ENTO Capital, an asset management firm registered under DIFC, and investment company Gulf Energy Corporation Limited, based in the UAE and Saudi Arabia have founded Ento Energy SPV LTD, a special purpose vehicle based in Abu Dhabi Global Market (ADGM).
The SPV is dedicated to making private equity investments in the Permian Basin of New Mexico and Texasin partnership with American Resources Inc.; a Houston, Texas based independent oil and gas company focused on exploitation of underdeveloped assets, with the aim of drilling, extracting and operating 112 Oil Wells within the next four years to bring the total production of the target Legacy Assets from 80 barrels to over 9,000 barrels of oil per day.with the assets are located on Proven Reserves of over 67.5 million barrels of oil equivalent (BOE).
Through Ento Energy SPV LTD, Gulf Energy and Ento Capital secured a $50 million acquisition to establish a 50/50 joint venture company with US-based operator American Resources Inc. The capital raised will be directed towards the purchase of assets and required equipment to extract and operate the designated oil wells. A 50 per cent average annual return on investment (ROI) on the initial capital raised is expected, where cash returns will be issued to investorsas dividend and capital appreciation upon exit.
ENTO Capital is represented by a prominent Board and Management with presence throughout the United Arab Emirates, the Kingdom of Saudi Arabia, and Kuwait, with the aim to increase its portfolio across the respective markets and to provide uniquely tailored alternative investment vehicles for innovative portfolio diversification through this newly announced investment.
With output totaling more than two million barrels per day, the Permian Basin is the second largest oil field in the world behind Saudi Arabia's Ghawarfield. The Pearman Basin produced a total of 30 billion barrels of oil and 75 trillion cubic feet of natural gas since its first well being drilled in 1921. Recently the region has been increasing its daily capacity by 30 per cent since 2014, reiterating its capability to extract oil effectively through the utilisation of world-class infrastructure.
“The oil and gas industry demonstrated high returns to investors due to the global increase in demand towards fuel. We have witnessed a consistent rise in oil prices which translated into further exploration and drilling, reflecting positively in terms of the oil and gas industry performance,” said Haitham Al Masri, SEO at ENTO Capital.
Al Masri added that there is a strong interest towards the energy sector, with an estimated 54 per cent upsurge in investment within the industry during the upcoming two years. As the global economy sees a continuous shift, along with the growth in demand towards energy products and solutions, it is apparent that the oil and gas sector will remain the largest area of investment. US oil is one of the most circulated products globally due to the nature of the improved market infrastructure, which in turn, makes oil and gas products more valuable and face rapid growth for both investors and individuals.
Al Masri also highlighted that the recent research available encourages investment in the Permian Basin, knowing that studies show over 20 billion barrels of oil recoverable and that over $20 billion dollars of M&A transactions have taken place in the Permian as of the first half of 2017.
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