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Montego Minerals Closes Sixth Investment Fund

Montego Minerals, an investor in oil and gas royalties and mineral rights in the Permian Basin, has closed its sixth 1031-eligible portfolio.

Montego Minerals, an investor in oil and gas royalties and mineral rights in the Permian Basin, has closed its sixth 1031-eligible portfolio, Midland Peak Minerals LLC.

The $11.2 million fund was an all-cash and equity investment that launched in December 2021.

Midland Peak Minerals represents a portfolio of royalty assets that expands across approximately 41,730 gross acres, 10 counties, 23 individual properties, and nine operators. Currently, this acreage has 152 producing wells with room for more than 238 additional wells to be drilled, the company said. The fund has a direct title structure, which allows investors to participate in a 1031 exchange into and out of the asset.

Montego Minerals acquires mineral and royalty interests for properties that have existing leases with energy companies. According to the company, the operators drilling wells on the property pay all drilling and operating costs, and the fund sponsor, Montego Asset Management, collects the royalty payments and distributes the funds monthly to investors.

“We believe the real story about energy will be a lack of investment in up-stream development, which will drive prices higher as voracious demand rebounds from COVID-19 lockdowns,” said Sean Caldwell, senior vice president of capital markets. “It’s our opinion that as the global economy returns to normalcy, hard assets like royalties in energy-rich locations with low-cost recovery are more likely to see outsized investor returns.”

Montego Minerals plans to open its seventh Permian Basin 1031/cash eligible portfolio to investors in February 2022.

Montego Minerals sponsors energy royalty portfolios offered within the independent broker-dealer community. The firm is a three-generation family office of petroleum engineers and geologists that has evaluated and purchased minerals and royalties in the Permian Basin for the last 50 years.

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