Enclime's due diligence framework
A Manual for Subsurface Investing
Enclime evaluate whether a subsurface system can physically behave, under stress and over time, in the way your investment thesis assumes. We do not allocate capital or manage pooled vehicles. Our role is to improve the quality of your capital decisions by interrogating subsurface risk before commitment.
Many advisory firms will send you a glossy marketing brochure. At Enclime, we would rather give you a framework. The reason is simple: your understanding of what we are doing — and how we approach it — matters. Subsurface diligence does not succeed through analysis alone. It succeeds when judgment, expectations, and discipline are shared from the outset.
Purpose and Scope
Our goal is to help you compound capital over time by improving how subsurface risk is understood before capital is committed. Everything in this framework is designed to support that outcome.
Doing this properly is demanding. It takes time, sustained attention, and specialist knowledge in earth science and engineering that most investment teams do not have in‑house. Subsurface behaviour is governed by geology, physics, and pressure, not by financial intuition or spreadsheet logic. Understanding it requires working through uncomfortable questions, integrating imperfect data, and applying judgment that sits well outside traditional finance training. Our role is to take on that work on your behalf.
The Subsurface Due Diligence Today
Most subsurface due diligence today concentrates on a relatively narrow part of an asset’s history. The emphasis is placed on production metrics, type curves, resource estimates, and development concepts—on what the system appears to be doing once it is already being produced. Earlier stages of the system’s formation, and the deeper processes that govern its behaviour, tend to receive less attention.
This emphasis is understandable. These outputs are measurable, comparable, and communicable. They fit naturally into investment processes, models, and committees. They allow decisions to be explained and defended. But they also frame the analysis around proximate expressions of behaviour rather than the ultimate causes that give rise to it.
Our Due Diligence Approach
Enclime’s due‑diligence framework is built around a small number of governing constraints that apply to all subsurface systems. These constraints are not selected because they are fashionable, easy to communicate, or readily quantified, but because they determine how a system will behave once it is stressed by development and capital. We evaluate them in a fixed order, and we do not adjust that order to suit the opportunity, because behaviour follows causality, not narrative.
While our bar is deliberately high, it is not abstract. Opportunities that survive our process typically exhibit clear pressure support consistent with trapped, mobile fluids; simple, explainable traps; early capital efficiency that resolves uncertainty quickly; timing aligned with fund or balance‑sheet realities; and a credible path to value recognition or exit.
Absence of any one of these does not automatically kill a deal — but it demands scrutiny.
What Would It Cost You
The first thing to be clear about is what we do not charge for. We do not charge success fees. We do not take commissions. We do not participate in carried interest, transaction fees, or upside participation of any kind. We do not benefit financially from you doing a deal rather than walking away from it. That is deliberate.
In our view, any advisory structure that rewards activity over judgment is misaligned from the outset. The easiest way for an advisor to look successful is to help close deals. The hardest — and most valuable — contribution is often to help you not proceed. If an advisor is paid more when capital moves, human nature being what it is, restraint becomes harder to maintain. We have no interest in building a business model that depends on optimism.
For investment teams evaluating deals
This manual is most useful when you are actively evaluating an opportunity or managing exposure across a portfolio. It is designed to surface the subsurface constraints that are often missed in early-stage diligence, but which determine outcomes under development.