The oil and gas market has been a traditionally close market for new investors. It has been significantly stagnated with high barriers to entry and in most cases is complex, slow and fundamentally inefficient.
In order to invest in them, most private equity oil & gas alternative investment products have high upfront fees albeit being those Private Equity Oil & Gas investments inaccessible to most investors.
In this context, there are companies trying to make the market a bit more open and accessible, and new blockchain-based companies have risen to try to do so. One of those is the Permian Holding private placement offering, which introduces an opportunity to turn private direct oil & gas investments into investable digital assets on a blockchain enabled platform which establishes an open, secure, transparent and direct oil and gas investment exchange under a regulatory compliant framework.
“With over 1.6 trillion barrels of proven oil reserves globally, the Permian Holding will allow investors the opportunity to own a share of the world’s proven oil reserves in the form of digital assets”, the company recently said on a press release.
Permian Holding, established as Permian Holding in Abu Dhabi Global Market (ADGM), is dedicated to making direct equity investments in upstream oil production and Blockchain-as-a-Service technology to issue investable digital oil asset-class.
A Token to capitalize on the world’s fossil fuels
With the advent of blockchain technology to the oil industry, the company reassures that it is now in mature stages to digitize the value of its proven oil reserves by issuing a dedicated digital asset; the Permian Token (XPR); a shari’ah compliant digital asset which represents investments in proven oil reserves in which Permian Holding invests.
The Permian Token, which raised over US$3.0 million from private investors in the first week of issuing their Private Placement offering, will be listed on regulated crypto exchanges to fuel growth and liquidity for prospective investors. This cryptocurrency aims to solve several major challenges:
- The transparency and the ease of trading the Permian Token (XPR) on regulated Security Token Exchanges will eliminate a major proportion of broker fees that are seen in the private equity sector.
- The level of transparency will also remove a significant level of administrative fees, removing the time taken to isolate and investigate delays and holdups.
- XPR provides innovative (democratized) investment approach in a widely stagnated environment.
- It reduces long private equity holding periods, makes direct investments transparent on a dedicated investor dashboard and increases the potential of wealth preservation by being invested in proven oil reserves that are increased with time.
As such, the Permian Token helps potential investors to gain a better understanding of the potential value of a field’s oil reserves and allows investors to benefit from growth in reserves and profits from oil campaigns.
The Permian Token helps existing oil & gas investors (i.e. hedge funds, private equity funds, institutional investors) to diversify their exposure within the same industry by including a compliant digital asset-class in their portfolio-mix to avoid long processes of due diligence (when making private direct investments) and allow them to use a crypto asset as an investment instrument.
“The Permian Token (XPR) brings newfound liquidity to the oil & gas (an in the future other hydrocarbons) sectors, by putting in place a liquid investable digital asset that represents equity in proven reserves in which the Permian Holding invests. Ultimately such an asset-class will allow global investors to access new sources of wealth preservation without the long holding periods seen in traditional private equity assets. Meanwhile allowing the sector to get access to finance and capital via trusted sources without the complex private equity investment process and high costs of initial public offerings (IPOs) or security issuances,” the company concluded.