COST 76.35 per Barrel
PRODUCTION 1,000 Barrels in Realtime
60220800 Barrels Today
12047702400 Barrels this Year

    How can I understand the partnership Documents?

    Most private investors compare reading oil & gas partnership documents to drinking from a fire hose: the volume of information and terminology are overwhelming.  There might be a “Project Overview” as well as the “Private Placement Memorandum” or “Confidential Offering Memorandum”.  How do you figure it all out?

    The purpose of this checklist is to help you organize the information so you better understand it.  When you are done, you will be ready to discuss the details further with the company offering the project.

    Project Type and Size

    1. Type (Infill Offset Workover)
    Drill Costs/Foot______
    Drilling Cost______

    2. Total Number Units____________    Unit Cost_____________    Unit % Ownership_______
    Number offered to Private Investors_______
    Number purchased by Company or Other Parties_____
    Number and Type of Payments__________

    3. Timing Estimates
    Start Date_________
    End Date__________
    Start Date for Monthly Revenue________

    4. Approximate Financial Projections (for Low/ Medium/High Oil Price Scenarios)
    Average R.O.I. and how calculated________
    Payback Period________
    Monthly Revenue (Gross and Net after taxes and operating expenses)__________
    Total Revenue ____________ Duration (Years) _______

    Petroleum Geology Considerations

    Petroleum geologists estimate the recoverable reserves by “reading the well logs” that indicate porosity (more is better), permeability (more is better), water content (less is better) and resistivity (more is better).  You should find information pertaining to this.  Read through it so you can discuss why the geologists think they will get a producing well.

    5. Geology Discussion Notes

    Memorandum Details

    The actual Memorandum is an official legal/business document whose structure should adhere to regulatory legal/accounting guidelines.  It is designed to provide transparency (Blue Sky Law) and protect the investor from fraud and deception.  If you have a Lawyer or Accountant, you could have them review it for compliance with generally accepted legal/financial practices.  Here are the key points to understand:

    6. Percent Markup (Profit margin for compensation to company for their work)

    7. Liability (Who is liable and how is it shared among all parties)

    8. Tax Issues (Write-off and deduction status)

    9. Contingency Costs (Subsequent charges partners might encounter: Workover,  Plugging and Abandoning , etc)

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