The front-end fee structure contributes to another complaint: lack of communication. Sadly,investors often find companies less willing to return phone calls or answer questions once theyve received a check. This tends to get worse over time particularly if there are problems with the project. The reality is an array of problems, ranging from equipment repairs to dry holes, can arise and should be addressed with investors. However, many investors have found companies go silent 8 when there are problems particularly when they have downplayed the risks when soliciting investors. Too many companies fail to bridge this gap by providing their investors access to important
updates pertaining to oil & gas projects. As a result, investors have less confidence in the performance or even the legitimacy of oil and gas investments.Imagine a group of companies that want to trade oil with one another. Normally they'd exchange paperwork and keep their own lists of trades. If they could move to a blockchain-based system for trading their oil, they could potentially reduce paperwork and have more robust record-keeping. There are many consortiums sprouting up that aim to replace paper trading systems with blockchain trading systems. They generally don't aim to tokenize real-world assets directly, but rather to use a blockchain system to enable trading of real-world assets. This is a hybrid of the old paper record approach and the new blockchain approach. The tokens only have value within the 1 Upstream Integration 2 Joint Ventures 3 Pre-Payment & Offtake Agreement 4 Technical Support 10 context of a contractual system involving all of the past and future participants. An example of this
form of tokenization is the IBM-Natixis-Trafigura oil trading project. Imagine an oil company owning land that has proven reserves of 100 million barrels of oil
equivalent (BOE). The oil barrels even though not yet produced could be tokenized by having ownership held by a company that has a standing offer to the public to redeem tokens for either a single barrel of oil or, if the redeemed tokens are less than a certain threshold, a fraction of the assessed value of the barrel of oil. Physical delivery of the oil barrels could be made at a certain location or shipped to a specified address. In this way, buyers could obtain an easy-to-transfer token and third-party markets could transact in fractions of the oil barrel price. This could potentially be a source of financing for the oil company and a way for the broader public to participate in the oil market.
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