Megalodon’s primary focus is to acquire high value working interests specifically targeting oil and gas resource prospects in continental North America. We do not limit our focus to any single geographic area because we strive to remain flexible and pursue the best opportunities available to the company. We believe one of our competitive advantages is our ability to acquire leases directly from the mineral owners through “organic leasing.” Because of our size and maneuverability, we can deploy our land acquisition teams into specific areas based on latest industry trends.
We anticipate that we will generate revenue by and through the conversion of our leasehold and owned properties into company-operated working interests in multiple oil and gas fields. We believe our drilling participation, primarily on a heads-up basis proportionate to our working interest, will allow us to deliver high value at low cost.
Megalodon explores and develops oil and gas prospects through a company-operated business model. Management has the required operational experience and technical skill to propose, permit and engage in the drilling process. After a well is completed, we manage all of the facets of operations including transport, marketing and accounting for all production. This model ensures that Megalodon is directly involved in all stages of the value creation process, safeguarding our assets and interests while controlling the external production cost structure and maintaining general and administrative costs at minimal levels internally.
Based on the success of exploration and drilling, the Company’s primary products will be light sweet crude, heavy oil and natural gas.
The market for Megalodon’s oil and natural gas production is affected by multiple factors, including the extent of overall domestic production and imports of oil and natural gas, the proximity and capacity of natural gas pipelines and other transportation facilities, demand for oil and natural gas, the marketing of competitive fuels and the effects of state and federal regulations. The oil and gas industry as a whole also competes with other industries in supplying the energy and fuel requirements of industrial, commercial and individual consumers.
Oil production is expected to be sold at prices tied to the spot oil markets while natural gas production is expected to be sold under short-term contracts and priced based on first of the month index prices or on daily spot market prices.