The strategy
ValkCap is building a low-cost, low-risk portfolio of oil producing assets by opportunistically and aggressively seeking assets for acquisition that have proven production but are of lesser value to its current owners due to strategic misalignment or high costs.
ValkCap continues to benefit from the cyclical nature of the oil & gas industry. The cyclical nature of the upstream business accounts for “low oil price environments”. In a low oil price environment, capital expenditure is often halted or deferred and assets are divested. Ongoing production and drilling operations are scrutinized and, if out of the money or marginal, often halted or minimized. In addition, many smaller, conventional onshore fields have seen underinvestment since the 2009 and 2014 price drops, mostly due to a shift of focus and capital to shale oil opportunities and other unconventional areas, leaving conventional fields with a significant development upside.