Faro Capital Group

We are raising $2.5 million to develop new production zones that were ignored and not developed in existing wellbores. Very strong cash flow and distributions, pass through tax benefits, and substantial ROI.

 Executive Summary 12 Well Program

Faro Oil & Gas Program III, LLC (PIII) will utilize big data, artificial intelligence, and machine learning, to analyze up to 12,000 existing oil & gas wells in a 23-county fairway in Northern Oklahoma to identify well development candidates capable of delivering attractive economic returns. The target wells were mostly recompleted 20–30 years ago in the Mississippi and/or Hutton zones at approximately 12,000 feet total depth. These vertical wells were originally for nat gas. Thus the oil was bypassed and ignored since oil prices were much less profitable than nat gas in those particular market conditions.  PIII will come up-hole to approximately 7,000 feet and complete  5  undeveloped zones. These wells are underpressured conventional wells, and as such all five zones may be completed simultaneously and production from each zone comingled with the other zones streamlining operations and lowering operating costs.

Investment Overview
PIII is seeking $2.25 million of capital to acquire two existing test wells, the Carl and the Francis, and develop an additional 10 existing, offset, conventional wells in Oklahoma. Each well requires 7–10 days to develop, place on pump and initiate production. Typically, first cash receipts are realized within 60 days of initial production. Each well is projected to produce approximately 80,000/BO oil over an anticipated  25-yearlife span. 21,000/BO production is expected within the first 24 months per well. The 12 well program is forecast to generate an estimated $10 million in net revenue in the first two years of production at $50/BO flat. PIII projects return of the initial capital investment of $2.25 million within 18 months (assuming a $50/BO flat VS current market prices of $65).
 Over a three-year hold period PIII’s predicted ROI is 5.4X invested capital, assuming the sale of all assets at $50/BO flat. Additionally, PIII will generate pass through tax deductions of $1,080,000 resulting in a net tax benefit of $432,000(assuming a 40% federal tax liability)that may be used by investors to offset passive income only. State tax benefits may be available as well.