Only a few years ago, Denver-based Phoenix Capital Group was a startup with five employees, aiming to acquire mineral and working interests projected to generate steady cash flows. Unlike many emerging firms in the oil and gas sector, however, Phoenix Capital did not have institutional growth financing or an expansive land team. Instead, the company built their foundation on a proprietary software platform to transform the process for identifying, underwriting, and acquiring assets with high cash-flow potential.
Today, Phoenix Capital Group stands among the most prolific operators in the Williston Basin. By the end of 2024, the company projects annual revenues of $290 million, demonstrating a rapid evolution from technology driven startup to a substantial, diversified oil and gas firm. The company’s growth trajectory has spurred industry interest, with many wondering, “How has Phoenix Capital Group ascended so quickly without following the typical path?”
Innovation and Efficiency First
“We’re not a Wall Street company,” states CEO Adam Ferrari. “Phoenix isn’t backed by private equity; it’s supported by my family, many of our employees, and thousands of hardworking American families. As a result, everything we do centers on building the technology and efficiency needed to support our growing family.”
This mission catalyzed the development of a technology stack engineered to identify and act on high-value opportunities. Unlike many industry peers, Phoenix’s initial engineering team comprised software engineers rather than petroleum engineers, allowing the company to efficiently uncover unique opportunities shaped by market dynamics and regional asset trends. This innovative tech-based approach forms the core of Phoenix’s acquisition strategies across 9 states and operational strategies, currently focused in the Williston Basin.
FinTech in Oil & Gas
The same software engineering team has played a pivotal role in capitalizing the business through a novel approach. Leveraging the JOBS Act, Phoenix Capital Group bypasses traditional funding channels by offering debt capital directly to individual investors, aiming to generate cash flow while preserving company ownership. The company’s high-yield corporate bonds, offering annual returns between 9% and 13%, are accessible to investors nationwide via Phoenix Capital Group’s in-house investor platform. This platform not only manages transactions but also enables investors to monitor and manage their investments in real time, bringing a fintech-inspired touch for everyday investors interested in the oil and gas industry.
Curtis Allen, Phoenix’s Chief Financial Officer, elaborates on the company’s direct-to-investor approach: “Our investors are key partners in Phoenix’s growth story. Building trust with over 4,500 investors is a testament to our growth strategy. We’ve developed technology that creates a seamless investor experience, which, in turn, reduces our dependency on institutional capital.”
Operational Efficiency and Record-Setting Drilling
A core driver of Phoenix Capital Group’s growth moving forward is Phoenix Operating, the company’s wholly owned oil and gas development subsidiary launched in late 2023. With experienced leaders like Brandon Allen and David Scadden at the helm, this division applies the same principles of efficiency and innovation to drilling and production operations in the Williston Basin.
Phoenix has consistently improved operational performance, achieving record-setting metrics in drilling speed and well depth. These operational efficiencies have reduced production timelines and lowered overall costs, enhancing Phoenix’s capital return rates and fueling further expansion.
Each well in the Williston Basin represents a significant capital investment, partially funded through Phoenix’s direct-to-investor bond offerings. With regional drilling costs generally ranging from $9 million to $13 million per well, Phoenix has maintained costs at the lower end of this spectrum, a feat attributed to a blend of technological precision and innovative field practices. For example, the company recently adopted new flowback techniques that saved over $1 million on a single pad.
David Scadden, Executive Vice President of Operations, emphasizes the importance of an integrated approach: “When everyone is on the same page and equipped with the best technology, we can reduce costs, mitigate risks, and ensure that every project is optimized from start to finish. This mindset permeates throughout the organization and is key to our growth.”
A New Growth Model for Private Oil and Gas Companies
Phoenix Capital Group’s strategy stands out in an oil and gas sector dominated by large corporations. By merging proprietary technology with a direct-to-investor financing model, Phoenix has achieved rapid growth without external capital constraints, allowing it to reinvest in technology and expand operations in the Williston Basin.
The decision to build an internal investor platform also marks a shift from conventional oil and gas financing. The direct-to-investor approach, powered by fintech principles, has democratized access to Phoenix’s offerings and reduced its dependence on institutional capital. This model has not only funded Phoenix’s growth but has also empowered thousands of everyday investors, aligning the company’s expansion with the interests of its diverse investor base.
As Phoenix looks to the future, it aims to deepen its footprint in the Williston Basin and beyond, harnessing both technology and capital efficiency to drive sustainable growth. The company’s approach highlights an emerging paradigm for private oil and gas firms: leveraging technology to streamline acquisition and operations, bypassing traditional finance structures, and fostering direct investor relationships.
To learn more, you can listen to Phoenix Capital Group CEO Adam Ferrari speak on oil and gas industry trends or visit the Phoenix Capital Group profile on Hart Energy.