The Foundation of a Growing Economy
Energy is at the heart of modern life. It powers industries, fuels transportation, and enables innovation in nearly every sector. Oil and natural gas remain the predominant energy sources, providing reliable, scalable, and indispensable power that sustains global economic growth. Whether in manufacturing, agriculture, or technology, energy is the engine that keeps the world moving forward.
A Sector with Strong Investment Potential
Despite advancements in alternative energy, oil and gas continue to meet over 80% of global energy demand.(1) The U.S. oil and gas industry has seen record-breaking production, with exports at an all-time high. As economies grow and infrastructure expands, demand for energy remains steady—creating long-term opportunities for investors seeking income-producing assets that are less correlated with stock market volatility. Given energy’s fundamental role in economic expansion, a well-balanced portfolio should include exposure to fossil fuels as a key component of a diversified investment strategy.
How Five States’ Funds Work
When a fund is closed, the capital deployment stage begins and Five States’ technical team engages a vast array of operator, asset owner and broker networks that have been cultivated for decades. Their familiarity with Five States allows them to identify assets that are likely to be of interest, and our team analyzes hundreds of assets to select the few that meet our investment criteria. For each, a period of negotiation ensues followed by a formal due diligence and purchasing process that can take a few weeks or months. Once acquired, the asset is onboarded and joins the portfolio of assets we manage.
Five States works with its asset operators immediately following a purchase to plan the coming year’s activity and to identify value-adding actions such as returning wells to production, selling surplus equipment, installing remote monitoring, identifying preferred markets for produced oil, natural gas and NGLs, scheduling remedial workovers, and more. The Five States technical team meets with the operators frequently to ensure that agreed-upon operating plans are executed timely.
Revenue from oil and gas production is aggregated across the fund portfolio and distributed to investors on a quarterly basis, net of hedging, fees, and fund-level obligations. A small portion of revenue is retained for working capital and managed conservatively in a high-yield money market account.
