Introduction to PermianChain
Permian Holding aims to reinvent hydrocarbon investing by using Smart Contract and Blockchain technology. They will use smart contracts to replace complicated agreements and papyrology and implementing token-economics to create a transparent, tradable and liquid digital asset for oil reserves.
Permian Holding is set to issue its first oil-backer digital asset called the Permian Token (XPR); which is a Compliant Digital Asset that represents investments in proven oil reserves and ongoing oil production campaigns that are listed and registered on a permissioned-access trust-protocol developed by PermianChain Technologies (“PermianChain”).
PermianChain will tokenize Proven Reserves to support Permian Token related assets and operations on the PermianChain platform.
Permian Token (XPR) is a crypto-asset that will give investors rights to the value of proven oil and gas reserves yet to be produced to enable the digital transfer of the value of its oil reserves in a digital way.
Also, the PermianChain team aims to implement smart contract agreements for each barrel in reserve to create a base price per coin that will determine a minimum fixed price per barrel, eventually creating a cryptocurrency that will be used for the off-take processes.
The process from above will help investors to finance the purchase and exchange of crude oil value in an easy and convenient way, allowing the team to introduce an innovative alternative investment solution.
Today there are several way investors can invest in oil and gas.
Investors can buy it either through the purchase of oil futures or oil futures options or through the purchase of commodity-based oil exchange-traded funds (ETFs).
In both cases mentioned above, there is a problem with an upfront fee. Whenever investors choose to purchase oil or gas, Brokers and advisors are getting a high fee. In addition the high upfront fees in private equity investments motivates offering company to make the deal as fast as they can, and demotivates them to offer deals with better potential returns.
Also, it is hard for investors, as if they want to buy oil or gas, they have to deal with complex agreements and significant amount of paperwork.
Permian Holding with PermianChain aims to build a digital platform to issue the Permian Token (XPR) that will allow investors direct equity participation by token contributors under a permissioned-access trust protocol. This way investors will be able to benefit from the oil supply that is proven to be available but which hasn’t yet been produced.
Permian Holding aims to use smart contracts to replace complex agreements and papyrology. By using Blockchain technology, all paper works are well secured and tamper-proof.
Also, smart contracts and Blockchain technology will drastically reduce the broker fee.
Use Cases Analysis
After buying an XPR, it can be liquidated through the PermianChain Exit Facility or [in the future technology development plans] used by midstream companies to claim their rights for the associated barrels of crude oil from the Permian platform.
When XPR token holder uses his right and transaction has done, the XPR tokens will be returned to Treasury and re-listed with new Platform Prospects upon listing Proven Reserves.
By using Blockchain each transaction, right claim and supplier fulfilment is going to be validated which will make a platform more secure and transparent.
PermianChain has plans to streamline shipping logistic through the use of digital wallets as each buyer will have a unique wallet which will have unique buyer’s drop-ship location.
This way whenever XPR has used for a barrel of oil, Blockchain protocol knows where to ship the order and can calculate all shipping and logistics costs for delivering the barrel to the wallet drop-ship location.
Blockchain and smart contract implementation will significantly reduce cost and streamline business operations for upstream and midstream companies without changing their current business model.
The Team behind Permian
The Permian team consists of 13 members, some of them are:
Mohamed El-Masri is a Founder and CEO at PermianChain and Director of Permian Holding. Also, he is Head of Corporate Finance at Ento Capital, Founder of Arabian Gulf Investments(AGI), and advisor at Veyron investment. Formerly he was at a Head of Development at Sharjah Oasis Real Estate and as Telemarketing Agent at Manulife Securities. He holds a bachelor’s degree in Political Science and Economics at Concordia University.
Michel Henriquet is a CO-Founder of PermianChain and Board Member of Permian Holding. He is a partner at Henriquet Associes. Michel finished Law at Université Paris II Assas.
Roger Muniz is a VP of PermianChain. Currently, he is also working as a consultant at Pemco Equipment Inc. Formerly he was CEO at Trident Global Enterprise, LLC. , And RoxWell Performance Drilling/RoxWell Thru Tubing. He has BS at Texas A&M University.
Nazim Baghirov is head of business development at PermianChain. Also, he is a co-founder&managing director of Kaspian Inovations Inc. and Executive director at SB& Company Ltd.
He has a bachelor degree in business administration at York University – Schulich School of Business.
For more information about the team and advisory board check here.
We have done a little Q&A with their founder and CEO Mohamed El-Masri:
Q1: What benefits will investors have from buying XPR token?
A1: The Permian Holding’s digital asset; Permian Token (XPR) solves several major challenges:
1. The transparency and the ease of trading the Permian Token (XPR) on regulated Security Token Exchanges will eliminate a major proportion of broker fees that are seen in the private equity sector.
2. The level of transparency will also remove a significant level of administrative fees, removing the time taken to isolate and investigate delays and holdups.
3. Permian Token (XPR) provides innovative (democratized) investment approach in a widely stagnated environment.
4. Permian Token (XPR) reduces long private equity holding periods, makes direct investments transparent on a dedicated investor dashboard and increases the potential of wealth preservation by being invested in proven oil reserves that are increased with time.
Q2 Are there any competitors in the space with a similar idea, and what are the benefits of tokenizing oil barrels?
A2: Asset-backed and investable digital assets are increasing in trend and becoming and area of focus for some investment companies. However, we have not found a competing business what we found was businesses in the sector that our technology can be compliment. We are not intending to change or compete with the industry / sector, we aim to add value and compliment the portfolio diversification strategy of existing investors in the space.
Q3 What are the minimum and maximum investments in STO and which currencies are accepted?
A3: Currently we are running a Private Placement Offering as an Exempt Offer of Shares in our home jurisdiction. However, upon a Token Determination Event and launch of our STO, we will only be open to professional clients and accredited investors. A minimum investment would be at $100,000 equivalent in BTC, ETH, or other currencies as may be accepted by our offering.
Q4: What are the start and end dates for the STO and pre-STO?
A4: STO dates are expected to start in early September 2019 as we close our Private Placement Offering in July 2019.
Q5: Do you have any comment to leave to your community?
A5: Our focus is to provide our community and the global capital market a compliant and ethical digital asset that represents investments in hydrocarbon reserves. We believe in innovative alternative investment offerings through the use of blockchain and crypto-economic models for preservation of wealth, and enhanced liquidity to our community in a transparent permission-based trust-protocol used by our community to ascertain key performance indicators and allow for inclusion in future decisions.
Q6: What does XPR stand for?
A6: XPR uses the letter ‘X’ as a standard ISO 4217 code for non-country currencies. The letters ‘P R’ stand for Proven Reserves, hence the Permian Token (XPR).
Also using X as the saying goes’ “X marks the spot” of the exact location of Proven Reserves. XPR is where global investors can now access investments in Proven Reserves.
Facebook: 45 followers
Twitter: 24 followers
Telegram: 69 members
Reddit: 15 subscribers
Private sale start date: 28th March, 2019
Private sale end date: July, 2019
STO start date: early September, 2019
STO end date: TBD
Price of the token in STO: $0.10
Total token supply: 10,000,000,000
Token type: Security token
Token standard: ERC20
Soft Cap: $1,500,000 (Successfully Closed)
Hard Cap: $100,000,000
80% – Public
2.5% – Treasury Reserves
2.5% – Marketing and Promotion
5% – Advisors and Partners
10% – Team members and Founders
Use of funds
87% – Proven Oil Reserves
6% – Blockchain development
3% – Research&Development
3% – Human Capital&Adminstration
1% – Marketing&PR
- Completed all disclosure documents, investment strategy, corporate registration and legal review for the private placement offering.
- Signed Memorandum of Understanding (MoU) with VersaVault Inc., a subsidiary of a Schedule 1 licensed bank in Canada for digital custody integration on the PermianChain Platform.
- Received Shari’a Certification from Shariyah Review Bureau to recognize the PermianChain and Permian Token (XPR) as compliant with Shari’a law and ethical investment practice.
- Produced and launched the PermianVAULT, a dedicated hard vault for storing Permian Tokens (XPR) to secure transaction processes.
- Appointing placement agent and distributor and filing of the offering with the regulators.
- Deploy capital towards approved oil campaigns with over 2,000,000 Barrels of Oil Equivalent (BOE) in proven reserves.
- Open submission for oil exploration and production companies to list their proven oil campaigns.
- Integrate real-time video tracking of oil well drilling on the PermianChain platform allowing Permian Token (XPR) holders to track investment activity and development progress.
- Launch the Permian Exchange and Permian Supplier to provide liquidity to Permian Token (XPR) holders and allow for further listing of additional XPR on the PermianChain platform to represent investments in larger portfolio of approved oil campaigns.
Q1 2020 – Q2 2020:
- Secure partnership with petrol stations globally to create a utility currency to be used as a form of payment for more economic fuel consumption.
- Create the consumer’s ‘PermianCard’ for the use of making payments and transactions, mainly at petrol stations globally.
Permian vs Vakt
Vakt is a trading platform for physical oil trades that use blockchain technology and smart contracts to put all paperwork to a blockchain based platform. Also, it will streamline post-trade processes which expect to reduce the post-trade user costs by 30%-40%.
Vakt won’t issue cryptocurrency or security token, but it will use blockchain technology for storing contracts, logistics and invoicing. Also, Blockchain technology will improve security and transparency.
VAKT is backed by major energy companies, banks and traders such as Shell, Equinor, Gunvor Mercuria, and Royal Dutch Shell.
On the other side, PermianChain will release a trading and investment platform while Permian Holding (its investment arm) will allow investors to participate in the issuance of the Permian Token (XPR) that will allow the exchange of proven oil reserves via smart contracts.
While Vakt is aiming to cut post-trade cots by using Blockchain technology, PermianChain aims to build a blockchain-based trading and investment platform and to reduce the broker fees and allow investable hydrocarbon digital assets to be traded securely and transparently.
Currently, the PermianChain project is the only project that will use Blockchain technology for oil investment and trading. It has an innovative idea to tokenize proven oil and gas reserves. With a blockchain business model, PermianChain will significantly reduce broker’s fee which will motivate investors to use this platform.
PermianChain has already launched the prototype of the platform for investing in oil and gas reserves and ongoing production campaigns. For security reasons, before accessing the platform users has to pass KYC and AML on-boarding process.
In my personal opinion, this project has an innovative idea to reinvent commodity investing, and it is indisputable that this approach is legitimate, but my only concern is to question whether it is too soon for the community to accept such an innovation. Moreover, I think that this project has to improve its marketing and social media presence.
- Innovative idea
- Low competition
- A prototype of the platform available
- Lack of social media presence
- Allowed only to accredited investors, minimum investment $100,000 USD
- Questionable necessity of blockchain technology for this project
Nikola is a cryptocurrency enthusiast, writer and researcher. He has been actively involved in cryptocurrency since 2013, primarily as investor and researcher. He’s been worked as news editor at rs.cointelegraph.com for over a year; as a ghostwriter, he wrote a plethora of well-researched articles on ICOs/STOs for his clients. He helped his clients grasp the full potential of Blockchain technology, and help them raise funds for their startups.