Western Energy

Oklahoma

Western Energy Development II, LLC ("WED II") is raising capital to drill and operate 26 oil and natural gas wells in rural Oklahoma ("the Project"). WED II will be partnering with an existing oil and natural gas operator ("the Operator"). Funds from the Operator will be combined with EB-5 fund capital to acquire land leases, drill, and operate the wells. Oil and natural gas that is drawn from the wells is sold to major oil companies, such as Shell and BP, at market prices.

Location

Management has committed to using EB-5 funding only for wells located in rural areas. A project qualifies as located in a rural area if it is located outside a metropolitan statistical area ("MSA") and has a population of less than 20,000.

Investors in a rural project qualify for a decreased investment amount of $800,000 ("the “Capital Contribution“), receive priority processing on their EB-5 application and get access to reserved visas with no wait (at this time).

Market Opportunity

The cost to drill and operate an oil well in Oklahoma is approximately $30 per barrel. Crude oil prices are the highest they have been since the early 2000's, with the West Texas Intermediate ("WTI") spot price projected to average $98 per barrel in 2022 and $89 per barrel in 2023 (source: U.S. Energy Information Administration). Over the next five years, the Project anticipates production of nearly 300,000 barrels of oil and nearly 950 thousand cubic feet of natural gas.

The world will continue to rely on fossil fuels for energy for the foreseeable future, and the U.S. supply is critical in meeting demand. Oil demand is expected to rise to 101 million barrels per day by 2025. Oil supply from the U.S. is projected to increase annually through 2030, while oil supply growth from OPEC and other non-OPEC countries is projected to decline (source: BP 2022 Energy Outlook).

Government Support

Oklahoma is a leading state in the U.S. for oil and natural gas production, in 2021 Oklahoma was ranked the fifth largest producer of natural gas and the sixth largest producer of crude oil in the U.S. (source: U.S. Energy Information Administration dated May 19, 2022). Aiding to the success of this is the state’s supportive regulatory and legislative environment and well-established infrastructure that makes it a hospitable place for oil and natural gas investments. There are favorable federal tax deductions, allowances, and credits available for oil and natural gas producers that pertain to leasehold costs, manufacturing, and intangible drilling and development costs (source: Deloitte, 2016). There are also favorable tax laws at the state level. Under the House Bill 2562, production from new oil and natural gas wells (both horizontally and vertically drilled) will be taxed at 2% for the first three years. After that, production will be taxed at 7%, the state’s overall gross production tax rate (source: Oklahoma State Legislature, 2014).

Management Experience

The Project management team consists of Greg Never, CEO, and Phil Vachon, Chairman. Greg Neher has over 20 years of experience in strategy, operations, marketing, and finance. Greg is also the founder of Giant Capital, an oil and gas investment manager. Phil Vachon has extensive board and investing experience, he is the former CEO of Liberate Technologies and former Chairman of Unwired Planet.

Job Cushion

The econometric study estimated that 1,433 jobs will be created from the Project, resulting in an excess of 443 jobs or approximately a 45% job cushion.