PetroFunders's original offering opened on November 18, 2020 and was completed on February 26, 2021. Except for the Updates section which may contain more recent information, the information on this page was accurate as of February 26, 2021.

PetroFunders

The premier crowdfunding platform, creating access to commercial grade oil & gas investments.

Introduction

“We aim to change the archaic ways of investing in oil and gas.Through our crowdfunding platform, the average investor will be able to access opportunities previously reserved for a select few. Democratizing oil and gas investing is the goal.”
Maurice Dukes
Co-Founder & CEO

Deal Highlights

  • Our team has over 100 years of combined industry experience. This is not your average startup.
  • As stewards of capital, we invest alongside our crowd of investors for economic alignment.
  • COVID-19 created an unprecedented entry point for investors wanting to buy at a low price.
  • A record number of companies and investors are moving online to access investments options.

Problem

Through extensive time spent in the oil and gas industry, our team noticed the recent shifts in the capital markets that make accessing capital difficult for smaller oil and gas companies. Potential investors have no easy way to access these investment opportunities.

  • Archaic dealings for oil and gas investing are outdated.
  • No easy way for investors to access tailored products targeting the oil and gas market.
  • With crowdfunding booming, oil and gas does not have a premier platform.

Solution

PetroFunders - Oil and Gas Crowdfunding Platform

We put together a powerful team to bring equity crowdfunding into the oil and gas sector with a disruptive business model. Our platform synchronizes fintech, crowdfunding, and deep industry experience.

Online Platform

  • An online platform built to scale that can handle 100,000+ investors, simultaneous offerings, with investment products for accredited, nonaccredited, and institutional investors.

Simplified Investing

  • Investors new to oil and gas don’t have to understand specifics about the industry.
  • By leveraging our team experience, investors can select an investment product with defined targets
    • Asset Classes (Example: Royalties)
    • Lower relative risk profile
    • Target Investment Returns (IRR / ROI)
  • We make it simple: Explore, select, invest, and collect checks.

Experienced Team

  • Our startup has over 100 years of experience with oil and gas expertise in fundraising, accounting, and SEC law, designed to provide the leverage needed to invest with confidence.
  • PetroFunders invests alongside investors who bring economic alignment and incentive to place capital in vetted opportunities.

ESG Standards

  • We develop environmental, social, and governance standards to ensure that investors on our platform benefit from the responsible placement of capital and overall company culture that fosters an inclusive environment.

Business Model

PetroFunders will generate revenue through each investment product that is funded through the platform.

  • Annual Management Fee
  • Revenue Share - Carried Interest

Each investment product will have a management fee and carried interest structure based on the complexity and ongoing oversight required.

Business model

Market

Market size
Market opportunity

Capital markets retreated from oil and gas investments amid the historically low global energy demand caused by COVID19. This created a unique opening for alternative financing options for smaller oil and gas companies that no longer had access to capital markets. Companies need to sell discounted assets to survive. With commodity prices pressured by suppressed global demand, it is the time for investors to enter the market with a simple buy low, sell high strategy. For the crowdfunding market, offerings in July (typically the second slowest month) was the highest month of new offerings since the industry started with 128 new offerings. This was 74 more offerings than July 2019: a 137% increase.

Historically, capital providers looked for oil and gas deals. Today, oil and gas deals are looking for capital. This creates a buyers market that our community of investors will be able to access.

Progress

  • Online crowdfunding platform built
  • Corporate structure finalized with 5 entities
  • 6 Core team members + 3 advisors
  • First offering on platform (Reg D)
    • Raised $1.91 million for first offering
    • 15 Investors

Team

We built a world-class team with industry expertise and a track record of creating value, navigating crowdfunding, and leveraging fintech. The combination of our skill sets and backgrounds make us the right team to create, maintain,and dominate the online marketplace for oil and gas investing while utilizing a disruptive business model.

Maurice Dukes
Co-Founder, Chief Executive Officer

Mr. Dukes co-founded PetroFunders in 2019. Previously held corporate reservoir engineering positions for a Caerus Oil & Gas, a private equity backed E&P company. At Caerus he was instrumental in maintaining and increasing the enterprise value exceeding $1 billion. He has expert technical and A&D experience with oil and gas assets in Texas, Louisiana, North Dakota, Wyoming, Colorado, and Utah. He has shown expertise in bringing forth material high value projects that meet or exceed acceptable market hurdle rates. During his time at QEP Resources, he launched an industry leading refrac program in Haynesville and oversaw a $35 million non operated budget. He holds a B.S. in Petroleum Engineering from University of Oklahoma.

Ryan Werking
Co-Founder, Chief Operating Officer

Mr. Werking co-founded PetroFunders in 2019. Previously, he founded a contracting company which specializes in robust financial modeling for various independents & national oil companies with projects ranging up to $600 million. As an executive of the contracting firm, he led an effort to integrate international and state laws, well abandonment designs, and project management for domestic and international clients. He assisted with the 2nd edition of Oil and Gas Property Evaluations, aka “The Blue Book”. Mr. Werking holds a B.S. in Petroleum Engineering from Colorado School of Mines.

Scott Sloan
Finance Lead

Mr. Sloan has over 30 years of oil and gas experience. He brings knowledge of upstream A&D processes, partnerships and corporate governance. Most recently, as President and CEO, he oversaw the completion of over a dozen US onshore divestments by Vanguard Natural Resources to mostly private operators and gained relevant insights into PetroFunders’ marketplace. Previously Mr. Sloan held senior leadership roles including SVP of Strategy for Hess and President of BP Russia; numerous corporate and business unit level CFO roles; and A&D oriented roles such as M&A Director for BP. Mr. Sloan has extensive experience in the boardroom as a director for companies including Vanguard Natural Resources, TNK, and Medgaz . He graduated from Colgate University with BA in Economics (Honors) and from the University of Chicago with an MBA.

Stephen Gornick, MS
Chief Investment Officer

Mr. Gornick has over 30 years of oil and gas experience, and has been directing operations, increasing production and proven reserves, and evaluating oil and gas reservoirs in North America since 1990. In addition to being President of East Peak Companies,he is the Chief Reservoir Engineer for Nissan Chemical. His current projects include new applications for EOR completions, paraffin treatment, and CO2/helium production. Previously, Mr. Gornick was instrumental in expanding Whiting’s production from approximately 10,000 barrels per day to over 150,000 barrels over a 10 year period. While at QEP Resources, he was responsible for adding 35 million barrels of proved reserves. Steve holds a B.S. in Petroleum Engineering and an MS in Mineral Economics/Operations Research from the Colorado School of Mines.

Richard K. Sotiros, CPA
Director of Accounting

Mr. Sotiros has 36 years of experience in accounting. He has spent the past 15 years as a member of the accounting firm of Sotiros & Sotiros, LLC, Certified Public Accountants, which includes clients in the oil and gas industry. As a CPA, he has been part of M&A activity with various clients, aggregating $50 million in deals. He was responsible for annual payments in excess of $500 million for film and television participating interests. In 1996, Warner Bros. merged with Turner Entertainment and he was involved in the logistics of coordinating merged departments. Mr. Sotiros has a Bachelor’s Degree in business from the University of Colorado, Boulder.

Marty Tate, JD
Senior Legal Counsel

Mr. Tate is a nationally recognized securities, finance, and fintech attorney. He counsels clients throughout the U.S. and internationally on structured finance, private and public securities offerings, fintech, initial coin offerings and tokens sales, SEC reporting, real estate financings, venture capital and angel financings, fund formation and compliance, business formation and corporate governance. Marty also represents several entrepreneurs, small and large companies, as well as private investors, finance companies, national and regional banks, investment banks and venture capital and private equity firms. In working with such clients, he regularly advises on various transactions, financings, contracts and agreements in an array of matters. Throughout his career, he has provided counsel in association with over $500 million in debt and equity financings.

Advisors and Investors

Gaurdie Banister Jr.
Advisor

Mr. Banister brings extensive leadership and international experience. Most recently he has been elected to the Board of Directors of Dow. He also currently serves as Lead Independent Director for Tyson Foods. From 2007 to 2015, he was the President and CEO of Aera Energy, LLC. Banister began his career with Shell in 1980. Banister has worked in California, Louisiana, Texas, and Singapore. In addition to his experience in global exploration and production, he worked in strategic planning, information technology and acquisitions. Active in the public and private sectors, Banister is a Director for the Harwood Institute for Public Innovation. Banister served on the Boards of the California Chamber of Commerce and United Way of Kern County. Banister is also a member of the Board of Trustees of South Dakota School of Mines and Technology. Banister holds a bachelor’s degree in Metallurgical Engineering from the South Dakota School of Mines. Banister also received an Honorary Doctorate degree from Fort Valley State University in Georgia.

Steve Coombs
Advisor

Mr. Coombs is a degreed Petroleum Engineer with over 40 years of experience in a wide range of petroleum engineering disciplines, including reservoir, production, drilling, operations planning and execution, cost estimating, finance and project management. His work has spanned the globe and includes a wide range of geographic locations, both on and offshore. Steve has experience in developing probabilistic (Monte Carlo) models for both cost estimating and oil and gas projects in general. Steve is a current Board member of the California Independent Petroleum Association (CIPA) as well as a member of the Society of Petroleum Engineers. He holds a Bachelor of Science in Petroleum Engineering from the Colorado School of Mines.

John D. Wright, PhD, PE
Advisor

Dr. Wright has 45 years of oil and gas experience in reservoir engineering, production engineering, and operations. Dr. Wright has been a principal in an independent oil company, owned working interests, and owns mineral interests. He has been a principal in two petroleum engineering consulting firms for a total of 25 years and was an Associate Professor of Petroleum Engineering at the Colorado School of Mines for eight years. He is the author of Oil & Gas Property Evaluation and has provided expert testimony in front of conservation commissions, state and federal courts, and arbitrations. Dr. Wright is a member of several professional societies including SPE, SPEE, SIPES, and SPWLA and served on the Board of Directors of the Society of Petroleum Evaluation Engineers.

FAQs

What is your company creating?
We are creating access to the oil and gas industry in a way that has never been available to the public before. Instead of investing in stock with Exxon or Shell, people will be able to invest in oil and gas royalties, workover programs, development projects, and more.
Where will your company be in 5 years?
Our goal is to be the premier oil and gas investing platform with a track record of delivering returns to our community of investors. We hope to build our investment products that take complicated oil and gas jargon, and translate it to where everybody can understand, participate, and invest. By developing concrete ESG (Environmental, Social, and Governance) standards, we aim to be pioneers of socially responsible investing in the world of oil and gas. By year five, we plan to be generating high margin recurring revenue from multiple lines of oil and gas investment products.
Why did you choose this idea?
Our founders wanted to invest in oil and gas projects, and after multiple deals they realized the oil and gas industry needed to be brought to the twenty-first century. We believe oil and gas investing should not be reserved for the select few, but open to all investors. PetroFunders is knocking down the door that historically has been closed to most.
How do you make money?
We generate revenue on each of the investment product funds from an annual management fee and a carried interest. As investor returns perform over time, PetroFunders earns a larger carried interest. As such, we are incentivized to place capital into the best opportunities.
What are ESG standards?
ESG stands for Environmental, Social, and Governance standards which are criteria for the socially conscious investors to screen investments. Recognizing the oil and gas industry has done a poor job at addressing its negative sentiment, we want to ensure we are investing with top-tier companies who operate responsibly. As founders, we want to grow the company while being responsible advocates of the environment, and contributing to important social causes. This is a cornerstone of our business plan and we aim to paint a better picture for the industry as a whole.
How will you use the capital you raise?
Our top priority is to develop, subscribe and deploy our first investment product. To accomplish this there will be large expenses going towards Securities Exchange Commission compliance, marketing, and investment due diligence.
When do you expect to generate revenue?
We expect to generate revenue once we fully launch our first investment product in early 2021.
What about renewable energy investments?
Given the current market conditions with global demand, COVID-19, lower prices, we are built to dominate the crowdfunding space for the oil and gas market. We will be building the track record of delivering value for our community of investors. With a crowd of investors on our platform, we will be best suited to pivot when repeatable, economic renewable energy investment options present themselves.
Why can’t I invest directly with oil and gas companies? Why do investors need PetroFunders?
Currently, you can purchase stock into publicly traded companies such as Exxon or Shell. However, there is no easy way to access income generating cash flow. Through our platform investors, we will be able to access oil and gas cash flow not available to the masses.
What is an accredited investor?
Historically, most private oil and gas deals have only been available to accredited investors. An accredited investor is someone who:
  • earned more than $200,000 annually for the past two years,
  • or earned more than $300,000 annually, combined with their spouse, for the past two years,
  • or has a net worth of at least $1 million (solo or combined with their spouse) excluding their home.
Are you an oil and gas company?
No. We are a financial technology platform that provides all investors access to oil and gas investment products. We are in the same peer group as Start Engine, RealtyMogul and Yieldstreet as it relates to crowdfunding. We are unique in that we are focused on providing access to the oil and gas industry.

Use of Proceeds


If the offering's maximum amount of $1,067,192 is raised:

UseValue% of Proceeds
Staffing$125,00011.7%
Marketing & Growth$118,50011.1%
Tech Support$77,5007.3%
Insurance$32,0003.0%
3rd Party Expenses$244,50022.9%
Advisory and Legal Services$347,00032.5%
Other expenses$70,4006.6%
Intermediary fees$52,2924.9%

Terms

This is an offering of Preferred Stock, under registration exemption 4(a)(6), in PetroFunders Inc.. This offering must raise at least $10,000 by February 26, 2021 at 11:59pm ET. If this offering doesn’t reach its target, then your money will be refunded. PetroFunders may issue additional securities to raise up to $1,067,192, the offering’s maximum.

$10,000 minimum
$878,140 raised

If the offering is successful at raising the maximum amount, then the company’s implied valuation after the offering (sometimes called its post-money valuation) will be:

10,936,133 shares
×
$1.14 per share
$12,467,192implied valuation

Pitch Deck

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Financials

Clear Rating Report

These financial statements have been reviewed by an independent Certified Public Accountant.

SEC Filings

The Offering Statement is a formal description of the company and this transaction. It’s filed with the SEC to comply with the requirements of exemption 4(a)(6) of the Securities Act of 1933.

We’re also required to share links to each of the SEC filings related to this offering with investors.

Understand the Risks

Be sure to understand the risks of this type of investment. No regulatory body (not the SEC, not any state regulator) has passed upon the merits of or given its approval to the securities, the terms of the offering, or the accuracy or completeness of any offering materials or information posted herein. That’s typical for Regulation CF offerings like this one.

Neither Netcapital nor any of its directors, officers, employees, representatives, affiliates, or agents shall have any liability whatsoever arising from any error or incompleteness of fact or opinion in, or lack of care in the preparation or publication of, the materials and communication herein or the terms or valuation of any securities offering.

The information contained herein includes forward-looking statements. These statements relate to future events or to future financial performance, and involve known and unknown risks, uncertainties, and other factors, that may cause actual results to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties, and other factors, which are, in some cases, beyond the company’s control and which could, and likely will, materially affect actual results, levels of activity, performance, or achievements. Any forward-looking statement reflects the current views with respect to future events and is subject to these and other risks, uncertainties, and assumptions relating to operations, results of operations, growth strategy, and liquidity. No obligation exists to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

More Info

Updates

  • Feb 27, 2021
    Primary offering finalized, selling 770,298 shares
    Sold 770,298 shares at $1.14 for a total of $878,139.72
  • Feb 27, 2021
    Two years ago, we were furious with the limited...

    Two years ago, we were furious with the limited options for us to participate in the wealth generated from the oil and gas industry. It has been our mission ever since to break down those barriers. This has been an extraordinary journey as we have raised over $220,000 in the last few days. To all the investors… buckle up!

  • Feb 25, 2021
    PetroFunders Investors! We want to thank you...

    PetroFunders Investors! We want to thank you for the enormous support during these final days of our equity investment round. Over $200,000 has been committed in the past 15 days as we approach the $750,000 mark. With one day remaining, this is the final chance to share this investment opportunity with your network. Thank you for joining us on this journey to democratize oil and gas investing! -MD & RW

  • Jan 15, 2021
    Dear PetroFunders Investors, We want to wish...

    Dear PetroFunders Investors,

    We want to wish you a Happy New Year and a successful 2021! In about a month we have raised just over $400k from over 100 investors. We would like to thank everyone!! Thank you for joining us in our goal to democratize the oil and gas industry. We have one of the best momentums currently in crowdfunding.

    As we continue to collect investments towards our maximum raise of $1,067,192, we are going to execute a “rolling close” which will disburse funds so we can execute the next phase of the investment products. Our team is already working hard to start on the legal contracts needed to bring forth our first Royalty Fund investment product. We will continue to raise funds on Netcapital so share it with your friends to keep up the momentum!

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