Resource Royalty Oil and Gas Fund Goes Full-Cycle
Resource Royalty Fund LLC, a Reg D oil and gas fund based in Dallas-Texas, has gone full cycle. According to a filing with the Securities and Exchange Commission, the company registered the $6 million offering in 2010 and began selling to investors in 2011.
The fund portfolio consisted of 11 royalty properties in the Cana-Woodford region of Central Oklahoma. The majority of the properties were operated by Devon Energy (NYSE: DVN), a multi-billion-dollar operator. Devon has drilled more than 500 wells in the region and recently announced that the region contains multiple layers of oil and gas bearing rock. The region is now called the “Stack Play”, and is one of the most active regions in the US with 36 working drilling rigs, the company said.
“The dramatic increase in wells on the properties offset the big decline in commodity prices, said Resource Royalty management.”
The company noted that oil prices were $90-$100 per barrel when the properties were acquired and $40-$50 per barrel when sold.
Resource Royalty Fund said that it has distributed 61 percent to its limited partners over the fund’s lifetime prior to the final disposition of assets. Assets were sold in the first quarter of 2017 and limited partners subsequently received disposition proceeds equaling 101 percent of their original investment. The company noted that its limited partners received a total return of investment of 162 percent over the period.
The property portfolio had a diversified commodity mix, receiving income from oil, natural gas, and natural gas liquids. At the time the properties were sold, the properties were receiving royalty income from 40 wells—an increase from the six producing wells when they were purchased in 2011.
The fund’s general partner, Resource Royalty LLC, provides developmental royalty partnerships and 1031 exchange solutions to investors. As of June 5th, 2017, the company has offered nine funds and several institutional transactions, totaling in excess of $100 million.
