Breitling Energy Corporation (BECC) ("Breitling Energy") announces a new strategic relationship with Patriot Energy, Inc. ("Patriot") of Dallas, Texas to expand Breitling Energy's Asset Management division. As part of its unique business model, Breitling Energy's Oil and Gas Management sub-division has existing industry partners that syndicate or de-risk royalty or working interests to a network of third-party industry partners or institutional investors. This sub-division generates on-going revenue and increases reserve value through management fees, carried interests in the properties acquired and/or prospect fees.
Under an Administrative Services Agreement (the "Agreement"), Breitling Energy will provide administrative services and access to certain of Breitling Energy's oil and gas prospects for acquisitions of working interests and/or royalty interests. In exchange for the services, Patriot will pay Breitling Energy $300,000 per month for Administrative Services, $250,000 per prospect fee, and up to a 25% carried interest in each prospect acquired by Patriot. The Agreement and further details will be filed in a Form 8-K.
"We are very pleased to announce this new strategic relationship with Patriot Energy for a number of reasons," said Chris Faulkner, Breitling Energy's CEO, Chairman and President. "This is a team of experienced oil and gas professionals who are extremely good in their fields of expertise and they are going to add substantial value to our operations at Breitling Energy, allowing us to expand our growing business," Faulkner added.
Unlike the traditional exploration and production operating model, Breitling Energy diversifies its risk through a process of selling working interests in its wells. This model recovers Breitling Energy's investment capital, and increases cash flow and reserves through management fees, prospect fees and a carried interest. In a climate of price uncertainty, this zero-debt, reduced-risk strategy has enabled Breitling Energy to look forward into 2015 without adjusting or reducing its planned development strategy.