Diversification is a good thing. Most investors hear the word and think of different dividend-paying and growth equities, fixed-income, some alternatives or derivatives added to the mix, real estate, and cash. Diversification should optimize returns and mitigate risk in any sector or asset class. Providers of portfolio management technology need to keep up with evolving investor demand for diversification and enable advisors and their clients to manage and account for a growing array of investment categories.
So, what about assets that reside not with banks or custodians but in the ground? Diversification includes interests in oil and gas leases for many family offices, trusts, and high-net-worth investors. These assets are extremely complex to track and value. But failure to adequately track and value them exacerbates their risks and limits their upside. Historically, investors had to collect information from many sources and, at best, cobble together spreadsheets to track their oil and gas holdings. Even then, it was still challenging to get a clear, reliable picture of what they owned, what it was worth, and how much revenue it was generating.
Enter MineralWare. Acquired by SS&C Technologies in May, MineralWare provides innovative management tools for individuals, family offices, institutions, and banks throughout the oil and gas sector, specifically the mineral and royalty space. As part of the SS&C Innovest family of trust accounting solutions, MineralWare brings badly needed transparency and simplicity into unique, hard-to-value asset portfolios that include oil and gas leases and wells. It provides a single, centralized resource for tracking monthly payments and ensuring that the investor is collecting all revenue that is due. With powerful visualization capabilities, investors and portfolio managers can see wells in which they own an interest plotted on a map, as well as activity in the area surrounding their wells. Users can track current activity in the market, such as new wells drilled, permits issued, wells shut in, and the locations of drilling rigs. Investors can also use alerts to track industry development, such as lease expiration alerts, new wells, and other information.
MineralWare is especially valuable for auditing purposes and ensuring that the operators of wells comply with their leases. In addition, it tells investors if the decimal interest (the basis for determining royalty payments), well volume, and payment amounts are correctly calculated.
Interest in oil and gas leases is an asset that often gets passed down through generations, and heirs will be unclear on the extent and value of the holdings they have inherited without help. MineralWare is a valuable tool for bringing them up to date and getting them engaged in the management of their oil and gas assets.
The MineralWare team has created a one-stop shop for managing oil and gas interests. But, just as importantly, the software is simple to learn and use. Only a few clicks will get you what you need on MineralWare’s platform. Additionally, MineralWare has extensive experience in integrating the solution with third-party portfolio management platforms so that wealth managers can analyze financial reporting from MineralWare in the context of their client’s overall wealth picture.
For investors that want to "drill down" into their oil and gas holdings in a notoriously opaque asset class and maximize the diversification and upside potential these assets offer, MineralWare brings the visibility and actionable information they’ll need.