What are some of the ways you identify a promoter, and boiler room pitch artist?

1) Every promoter I know of has very little specific knowledge or experience when they talk about geology, science, engineering, or the developmental oil field process…and they all try to make up for their gap in knowledge, education, training, and experience with lots of emotion, hype, and subterfuge, or misdirection to keep you from asking too many pointed questions which would prove their incompetence.

2) Pitch artists are always in a hurry while they are constantly changing & switching their stories, and presentation, and shifting a caller to other people in their boiler room operations with titles they make-up, or copy.

3) Pitch men are short on the day to day knowledge you only get in the trenches in oil & gas field operations; but they are long on superfluous details related to what if, what could be, or they love to make projections, production estimates and forecasts…there is nothing wrong with doing this except, it doesn’t cover the really important stuff like; what does it cost to break-even, what are the production, and lifting costs to get oil out of the ground, are there commercial recoverable reserves of oil & gas, but most importantly, have they ever had a history they can prove of making money for investors?

4) The pitch man has one goal…get you in the ‘ether’ or ‘chloroform’ environment’ or one they create, and keep you there until you buy based on the excitement and greed feelings they can get you to feel long enough. Most will hit you up for another investment even before any cash flow is seen from the first investment the uniformed, and naive investor makes.

5) The worst part about promoters is they have no skin in the game, often charge obscene front end commissions, and cannot get the truly professional people in our business to back them. This is why most reputable engineers don’t like to talk to investors about a promotional deal being offered to the unsuspecting, or often unaccredited or unqualified, and unsophisticated investors.

6) Ask anyone who calls you from a lead source, or even when you respond from a website…what is your track record for the past 20 years, show me the proof with names, dates, and places, and get them to send you their company resumes’ for all of their management, and the sales people so you can check them out, and you’d better for your own safety, and to be assured the companies, and people who call themselves management and claim to be legitimate? My guess, is 90% will not be. Stupid as it seems, many of the boiler room, turn-over houses consistently use alias names and won’t tell you their real names. Hang-up on these people!

7) Another ploy I hear about, and see regularly, is the use of referrals who are listening-in on conference calls set-up by the company, and these are often recent investors who haven’t received significant cash flow, or their investment funds returned. Remember, it’s your money being invested…and you have the responsibility to do your own due diligence. Don’t rely on the other investor to do it for you.

Watch-out for the promoters who bless you, and who constantly use religion to enhance their credibility, and stature, and attempt to identify themselves as so called ‘God fearing men’. This has got to be the worst form of sacrilege I’ve seen in this business.

9) Listen to a promoter’s repetition of data presented over time…and especially if it keeps changing, and you can’t tie-it to actions taken by the promoter in timely fashion. At the very least what you are seeing or hearing is someone who is disorganized, or is having difficulty performing based on a lack of money to do what is promised, or worse, the money being raised never gets to the operator, or developer, and to the development project in the oil & gas fields. Another possibility, and highly probable, is the funding just isn’t getting the results a promoter hopes for and this happens when people don’t find oil in commercial quantities. This can be a legitimate risk always present in any oil deal offered to private or public investors.

10) Finally, if you can’t reach a promoter after you invest, and receive spotty, or no updates, it’s a bad sign.

More to follow.