Phoenix Energy One, LLC: A Guide for Potential Investors

Thinking about investing in Phoenix Energy One, LLC? First, understand that this is not a traditional IPO. You are not buying shares of ownership. Instead, you are acting as a lender. You provide a loan, and the company promises to pay you interest in return.

Use this guide to decide if this investment fits your portfolio.

1. What is this actually?

Phoenix Energy One explores and develops oil and natural gas properties. They are not selling stock. They are selling "Phoenix Flex Junior Secured Notes." Think of these like a high-interest savings account, but with much higher risk. You lend them money, and they pay you back with interest over 10 years.

2. How do they make money and are they growing?

They earn money by selling the oil and gas they produce.

• The Financial Picture: The company’s profits fluctuate. They reported a profit of $66.1 million for the year ending December 31, 2025. However, they lost $140.1 million in the three months ending March 31, 2026.
• The Growth Plan: They are moving toward "direct drilling," where they operate their own wells. This is expensive. They estimate they need about $147 million in 2026 to fund these drilling projects.

3. What will they do with your money?

They aim to raise $100 million. They already owe over $1.7 billion in long-term debt as of March 31, 2026. They will use your money to fund operations, pay off existing debts, and finance drilling. There is no safety net. The company has no special accounts or reserves to guarantee they will pay back your principal or interest.

4. What are the risks?

• You are at the back of the line: The company has many other lenders. If the company runs out of money, those "senior" lenders get paid first. You only get paid if there is money left over.
• Structural Subordination: Your notes are backed by the parent company, not its individual subsidiaries. If a subsidiary owns the valuable assets but has its own debt, those creditors get paid before you. You may have no claim to those specific assets.
• No Trading Market: You cannot easily sell these notes if you change your mind. There is no public market for them. Your money is locked in until the maturity date or your chosen exit window.
• High Debt & Competition: They are borrowing heavily in a tough, unpredictable industry. They cannot guarantee they will find future funding, and they must follow strict rules regarding their current debt.
• Control: The Ferrari family controls the company. You have no voting rights and no say in how they manage the business.

5. What’s the "deal"?

You choose an interest rate between 6.00% and 7.00% and pick how often you receive payments. You also select a "Set Put Interval" (3 to 18 months), which is the window when you can ask for your money back. Note that the company pays brokers commissions to sell these notes. These costs could exceed $800,000 if they hit their $100 million goal.

6. The Bottom Line

This is a debt investment, not a stock play. You are betting that Phoenix Energy One can manage its $1.7 billion debt while funding a $147 million drilling budget. Given their recent quarterly losses and your position at the back of the line, this is a high-stakes move.

Disclaimer: I am an AI, not a financial advisor. This is a complex debt offering. These notes carry significant risk, including the potential loss of your entire investment. Always read the official "Prospectus" document before investing.