FREQUENTLY ASKED QUESTIONS & CONCERNS

We’ve compiled some of our most frequently received questions and concerns below. We at Alpha Seven Energy pride ourselves on ensuring each of our investor partners have a high level of confidence prior to coming on-board.

If you have any questions or concerns that are not addressed on this page, or if you would like more information, please use either our live chat box in the bottom-right corner of this page, or go to our Contact Us page and fill in your details, and one of our team members will be in touch with you soon.

During the COVID-19 outbreak, we took the opportunity to record a video conference featuring our senior partners responding to some of the questions below.

You will have direct ownership in the well(s), known as a working interest. Each project is generally divided into phases, with each phase containing one to two wells. There is a special purpose entity, or SPE, established for each phase with a set amount of working interest assigned. Investors have units in the SPE allocated to them in proportion to their investment amount. As an investor, you will receive monthly revenue disbursements for the life of the wells, and a lump sum payment as part of a potential exit strategy.

Each investor will receive a portion of the monthly oil and gas net revenue produced from the wells in which they have an investment in. This is known as a monthly revenue disbursement or MRD. These revenue disbursements are essentially a monthly residual income stream that is directly paid to you in US dollars. 

Each project differs regarding the specific rate of return, the timeframe to start receiving revenue, and the total number of years in which one would receive their monthly residual income. That being said, how many barrels of oil per day a well produces, and the percentage of ownership an investor purchases in a well are the main factors that dictate what one’s monthly ROI would be. We look for projects with the optimum risk-to-reward ratio, which have a short drill-to-production period, and we seek returns of between 300% to 600% on capital that you have invested. Most wells can produce oil for 20-30 years, yet there are many wells from the 1950s and ’60s which are still producing commercial quantities of oil and gas today.
Over 85% of our non-US resident investors have never invested internationally before. Coming on-board with Alpha Seven Energy and investing in our projects was not only their first time investing overseas, but it was the first time investing in the oil and gas industry. There are major benefits for you when investing in the US, which you simply don’t get in Australia. For example, the US is very proactive regarding being energy independent, because of this, there is less red tape which massively speeds up the permitting process, so projects can generate revenue dollars for investors much quicker than most other countries. 
 
For 23.5 years out of the last 25 years, the US dollar has been higher than the Aussie dollar, so by investing in America and receiving a residual income stream in US dollars, you can experience a very sizable boost in your profits just through the difference in the exchange rate. As of April 2020, every US $10,000 would convert into approximately AU $15,700.
Electric cars will undoubtedly play a role, but the question boils down to timing and the magnitude of the impact this trend will have on the energy sector. Today, we have approximately 3 million electric vehicles, and the International Energy Agency predicted that the number of electric cars would grow to 125 million by the year 2030, providing the world takes an aggressive approach.
 
Now, compare that to the 1 billion cars powered by combustion engines. As you can see, we still have a long way to go. Additionally, oil has several uses beyond fuel for cars. You have other transportation fuels (such as those for planes, jets, shipping), fuel oils for heating and electricity generation, asphalt, chemicals, plastics, and synthetic materials, etc. Oil is involved in nearly everything we use. Demand for these products will increase from progress in the developing world and global population growth. 
ASE celebrated its third anniversary in May 2020. Last year was a massive year for us having completed our largest project in the heart of the Permian Basin with the Radmila well, which was named in honor our CEO’s mother. That well peaked at over 900 barrels of oil in a single day. We also established ASE Operations which is a fully licensed operator in the state of Texas, and in May 2020, we established ASE Equipment, which will own a wide range of oilfield tools, rigs, and other equipment. 2020 is set to be even bigger as we are currently drilling two wells simultaneously, one as part of our Seminole County project in Oklahoma, and the other on our recently acquired 23,958-acre project at Mesa Vista Ranch in the Texas Panhandle.  
Most of our projects produce more oil than gas, so oil prices will definitely have an effect on your income, but the good news is that because our cost to produce a barrel of oil is significantly lower than companies with much larger overheads, we can still generate very solid returns during times of low oil prices. On top of this benefit, most of our wells produce gas too, so you have instant diversification via income from not only oil but gas as well.
Most oil & gas companies have a huge amount of debt. We have none. Currently, some companies are having to cease drilling and sell their oil assets, yet we are in the process of buying and drilling. Because of this fact, we have recently secured our largest project to date, a 23,958-acre lease at Mesa Vista Ranch in Texas, which was owned by the late billionaire oil and gas tycoon T. Boone Pickens. Had it not been for the coronavirus and low oil prices, we may have not been in a position to have secured this asset. As of April 2020, we are currently drilling two wells, one in Oklahoma and the other at our Mesa Vista Ranch project in the Texas Panhandle.
This is an interesting topic as most people think that in order to support a clean energy initiative, we need to stop investing in fossil fuels. The fact is, it is the complete opposite. The decarbonization transition requires massive amounts of investment in fossil fuels in order to research, innovate, and produce cleaner more efficient technologies, and methods to reduce emissions in production. Without this investment, the transition will be a lot slower, unfortunately, and will also restrict supply which will, in turn, push oil prices higher.
 
In saying that, we at ASE support the energy transition and are looking at ways to diversify into renewable energy sources that will provide an acceptable risk-to-reward ratio for our investor partners.
Out of all of the wells we have drilled, only two have involved a horizontal frack, and both had zero issues. When hydraulic fracturing is properly regulated, it is safe for the environment and this is proven by over 250,000 fracked wells being safely drilled and operated in the US. We are also under the jurisdiction of the Environmental Protection Agency.
Over 70% of our investors have, or are currently investing in property and the stock market, yet only a small handful have invested in direct oil and gas ownership prior to joining ASE, but 100% of our investors want the same thing. They want to diversify their portfolio, create a residual monthly income stream which is managed on their behalf, they want the potential to massively boost their ROI, and the ability to create multi-generational wealth while earning US dollars.  
The level of due diligence we undertake before offering investors equity in our projects is extremely high and very detailed. We have a strong team of industry experts and geologists who vet each project and all of the research data. For example, in our past and current projects, we gathered seismic data that clearly shows the presence of hydrocarbons, both oil and gas. We look for multiple stacked opportunities, meaning each oil and gas formation, also known in the industry as a “pay zone,” can be targeted to increase production and of course, to improve the overall ROI. We also focus on projects which involve PUDs, or proved undeveloped reserves. For example, on our Mesa Vista Ranch project, we have over 60 PUDs that we could potentially drill with an estimated 20.6 million barrels of oil equivalent beneath the ground. In our Seminole County project, our new wells are offsets to already producing wells, for example, the Oddfellows A1 has been producing commercial quantities of oil since December 2017.  
There is a tax treaty between Australia and the US, which means you will not be double-taxed. Investors will pay duties in the US, and most of our investors use our CPA, Patrick Berry, who has been in the oil and gas business for over 55 years. Because there are very attractive tax benefits when investing in oil and gas, it is always a good idea to utilize an accounting firm who specializes in this industry.
 
Reference: https://www.irs.gov/businesses/international-businesses/australia-tax-treaty-documents
Well, oil is a free market driven by supply and demand. Yes, the industry is currently experiencing a supply glut, predominately due to the COVID-19 pandemic, however, this isn’t the first time, and it definitely won’t be the last. We expect (at times) to see imbalances with the supply and demand, which also means this current supply can revert and overcorrect. 
 
One interesting observation is seeing government intervention being rolled out to support low oil prices. International and domestic budgets, as well as millions of jobs, depend on the oil industry. Therefore, we are seeing and will continue to see support given to the industry.  
Currently, due to COVID-19 and the slowdown in the economy, the Australian dollar is at its lowest it’s been in the last ten years when compared to the US dollar. Throughout most of history, the Australian dollar has been weaker than the US dollar and that’s why an Australian investor receiving profits in USD is a massive benefit and can help to boost ROI.
Most importantly, we have an open-door policy in both our Dallas and Sydney office. We welcome any potential investor to travel to Dallas to meet with us, like many Australian investors have. Qantas has direct flights from Sydney to DFW airport. Come meet our team, our attorneys, our geologists, driller and petroleum engineer. More than likely, we will be drilling wells on the Mesa Vista ranch. We will take you to the location, and you can “put boots on the ground.”
 
If you can’t make it to Dallas, you can come and meet Pete or Grant in our Sydney office. Additionally, we provide extensive amounts of evidence regarding not only the project history and geology, but the legal agreements and permits as well. We have one of the top oil and gas lawyers in the state of Texas create these agreements and ensure that all of the legal framework is correct and in place. His name is Stewart Hoge. Every project has a lease agreement and each phase has an SPE, or special purpose entity created to hold the individual asset, which in this case, is the wells you are investing in. A private placement memorandum (PPM) is provided as well as a subscription agreement, which is countersigned by our CEO, Chris. Each state has its own governing body that oversees the oil and gas industry. For example, the Texas Railroad Commission (RRC) ensures that oil and gas companies are following the correct legal process before drilling and during the on-going management of each oil and gas well. You can go onto the RRC website and cross-check that the operator on the project is fully licensed and is in good standing. Plus every well has a unique API number, similar to a serial number, which is registered with the RCC, and all of this information is available on their website. Take your time and execute your due diligence, and if after all of that, you still don’t have the confidence, then we will be the first to tell you that this is probably not the opportunity for you, and we can go our separate ways amicably.
We want all of our investors to be comfortable with their decision to join ASE and to invest in our oil and gas projects. If you are a very conservative investor who only likes blue chip shares and a small dividend of 6-8% per annum, then this opportunity may not be suitable for you. However, most investors want direct ownership in the oil and gas wells, because you can receive not only huge tax benefits, which you don’t get with listed companies, but also the potential for monthly income and the potential to make 300% to 600% returns. Each investor receives a full PPM and legal agreements prior to investing. Once on-board, you will receive a project folder with your official share certificate showing your exact unit investment.
There are risks involved with any type of investment you make and most of our investors only invest a portion of their overall portfolio as they seek diversification. That being said, we do pride ourselves on mitigating risk as much as possible. We like to focus on projects that have consistent surrounding production and solid data showing oil and gas reserves in place. This massively increases the likelihood of a successful well and project. Additionally, we offer investments in multiple projects and wells, which allows you to spread your investment over more than just a single well.   
It all depends on the individual project. Each project is different in size and scale and has a different capital requirement. Therefore, the timeframe to raise, drill, and generate revenue can vary between projects. For example, regarding our Borden County project, the well cost was approximately $12 million and took 8 months to drill, complete, and start flowing oil. Some of our investors prefer the strategy to focus on smaller projects with shallow wells. These have a smaller turnaround to raise capital, drill, and produce oil. These types of projects are online and reduce the cost basis earlier with revenue for investors. For example, one of our current projects that is currently drilling in Seminole County, Oklahoma, has an approximate 90-day time horizon from the commencement of drilling to investors receiving their 1st monthly revenue disbursement.
ASE, and a large portion of our investors, use the Berry & Moro CPA firm. Patrick Berry has worked in the industry for over 55 years, specializing in oil and gas taxation. Fabian Moro has an MBA in international finance and is an Associate Petroleum accountant. There are two videos on Youtube where we interviewed Patrick at the Dallas Petroleum Club. This is an absolute must-watch for anyone wanting to know more about the massive tax incentives available with oil and gas ownership through Alpha Seven Energy.
 
https://www.youtube.com/playlist?list=PLqUQ-2vI1buMgiR6w_S5Bd22oeEAvNj1z
Every investor will receive their personal username and password to access the Investor Partner Portal. Each phase and project has its own designated section where you will receive updates on your project’s progression. Our investors get to see and experience every step of the project’s development, from permitting approval, drilling, all the way to production and beyond. Every time there is an update, you receive an email notification, and every update is timestamped creating a complete project history timeline. Also, during the entire drilling operation, we have live-feed cameras set-up on-site so you can watch and listen to the action up-close and personal, 24 hours a day. 
 
Additionally, after you become an investor partner, you will have open lines of communication with the entire ASE senior partner team in Australia and the USA. You can easily reach us via text, phone call, or email if you ever have any questions. You can also drop into our Dallas or Sydney office to catch up. We are an open book.
Yes, all investors will need a US bank account established. Your monthly revenue disbursements will be paid directly to this account from the oil and gas net revenue. A Limited Liability Company or LLC needs to be formed prior to the bank account setup. This process doesn’t require you to be in the US. Most of our investors use Steve Holmes and Rachel Patman, who are part of our external legal counsel to set up their US entity. Because of our strong relationship with Prosperity Bank, they allow the accounts to be established remotely. You have full internet banking and a visa debit card posted to you in Australia (or most other countries) so you can access your account anywhere in the world 24/7. 
Yes, we most certainly are. Chris Hemsworth and Dylan Knight, who are the founders of the company, both lived in Australia, becoming good friends and then business partners. Chris was born and bred in Sydney then moved to Dallas in 2014. As Alpha Seven Energy evolves, we have more of an internationally owned business, with shareholders from New Zealand, the United Kingdom and South Africa. Over 60% of our investors are based in Australia, and because of this fact, we have established our first Australian HQ in the Sydney CBD.

Disclaimer: The information and opinions expressed on this page were accurate at the time of writing, but are subject to change. Additionally, any mention or examples of tax information are for general information only and are not intended as individual tax advice. Consult your personal tax advisor concerning the applicability and effect of oil & gas investments on your personal tax situation. Tax laws change from time-to-time and there can be no guarantee of the interpretation of the tax laws.