Phoenix Capital Group was founded by a team of experienced professionals with expertise in software development, engineering, and finance. Our leaders have over 60 years of combined experience in the energy sector with a focus on capital deployment and asset management. We are actively expanding our proprietary architecture to ensure we continue providing market leading services to our clients, both investors and land owners alike.
What We Buy
Phoenix Capital Group has a broad range of experience working with land owners across the country. Since the beginning, Phoenix Capital Group has worked with owners ranging from the individual with a small fractional interest to large farmers and institutional owners with thousands of acres. We acquire the following types of interests.
Our goal is to ensure that the sale of your mineral/leasehold rights is complete with transparency, accuracy, and speed. Moreover, after the sale, we are still here to answer any questions and assist in various post sale issues that arise from tax questions to royalty allocations. The Founding Team at Phoenix Capital Group has decades of combined experience transacting in mineral and leasehold rights and has developed the following simple process.
Here are the specific steps we follow:
1. Present a Valuation
The valuation will come in the form of an official offer to purchase the interest based on our preliminary assessment of your ownership.
2. Pre-Closing Check
Once the offer is signed, we will check your title again to ensure no recent burdens have clouded the title.
Final payment is tendered. Historically, the average closing timeline is around 20 business days.
Why is Phoenix Capital Group Interested in Buying Minerals?
Phoenix Capital Group has the ability to use mineral acreage to create value that would otherwise not exist while in the possession of many passive owners. This is not a new concept; it is a basic tenet to the power of production that has created wealth for centuries. The famous quote by Thomas J. Watson ‘Nothing happens in business until something gets sold’ is a simple truth that is often overlooked and sometimes misunderstood.
To illustrate this principle, let’s look at an example.
Consider the value difference between unharvested wheat in a field and its value after being harvested, sold, milled, transported to a bakery and baked into a delicious loaf of bread. While in the field, the unharvested wheat has value, but it is subject to the risks of drought, disease and infestation. Harvesting wheat adds value, preparing the wheat to be transported to the mill. But even harvested wheat will spoil and become worthless if it remains unsold. Each step along the process of harvesting, milling, transporting and baking adds value that would not exist without their inputs. Milling removes the impurities and combines the wheat components into a variety of products, including wheat flour. Wheat flour, yeast, oil and water in the hands of a skilled baker can attain value that the raw ingredients couldn’t realize in their original state.
All along the production process, wealth is created by adding value. Those who participate gain wealth by adding value as the raw ingredients make their way to become a new creation: the end product.
By taking raw ingredients through the production process and creating something new, wealth is created that would not otherwise exist. And each participant in the process is able to share in the created wealth by their contribution to the increase. A healthy economy and a high standard of living depend on the efficient and effective use of limited resources to create wealth.
How Does This Relate to Buying Minerals?
PCG seeks out and gathers mineral interests to create value with our vision, experience and expertise, adding it to our portfolio. By doing so, we are able to create value that didn’t exist by spreading our risk within a valuable yet volatile asset class. We are also able to create value by leveraging the assets in our portfolio to negotiate better terms with operators and to hold them accountable for their leasehold obligations.
PCG creates magnitudes of value by leveraging the mineral interests in our portfolio to invest in the working interest in wells, a position that is too risky for most mineral owners. Investing in working interest is much riskier than collecting royalties, and many mineral owners have lost a lot of money in short periods of time by investing in working interest.
But with our vision, expertise and experience, investing in working interest provides PCG and its investors the potential for higher returns than simply holding mineral interests and hoping for royalties. While royalty payments are subject to the worst-case tax obligations of ordinary income, PCG is again able to create magnitudes of value by gaining the tax advantages afforded to those investing in the energy industry.