My career in the oil & gas industry began in 1983 while an account executive with Merrill Lynch in Hollywood, and later with E.F. Hutton in La Jolla, California. I liked oil and gas since I had family members in the business, so I researched everything these large financial firms had to offer in their portfolios of oil & gas investments; including looking at their various private placement (PPM) offerings targeting, production, developmental, and exploratory oil & gas investment projects being offered throughout the US. I didn’t like the major brokerage companies up-front promote of 25%, 8% to their brokers, plus the standard 25% working interest paid the operators so I left E.F.Hutton, and began working directly with operators.
I believe the big houses, and nearly all promoters, and ‘boiler room sales organizations’ are way too far away from the action in the field. They simply cannot and do not take the necessary time to do adequate due diligence, or provide hands-on oversight, nor do they have the technical experience required to insure ‘Operators’ are competent to accomplish what’s expected when raising capital, and investing in the industry. After leaving the brokerage houses in 1984, I continued to research everything I could get my hands-on about oil & gas investments while working in several different capacities in the industry until the present. My family has been in the business for over 50 years, and this includes family members serving at the executive, and management level with Standard Oil of California, rough necks in the field, and engineers in the industry in California, Texas, and Louisiana, etc.
My experience during the past 32 years while working exclusively in the oil & gas industry has included; sales & marketing, managing several oil & gas partnerships as a fund manager, being a sponsor & issuer, operating oil & gas properties, and performing due diligence for individuals and companies wanting to learn more about the industry.
The majority of my private placement offerings and joint venture partnerships were successful ventures for investors. I structured projects to provide the best upside for my investors so they could have the best possible chance to realize multiple returns on their investment funds; and do so while receiving the great tax write-offs that are still available in oil & gas drilling programs. Yearly joint interest billings (JIB’S) reporting and G.A.A.P. audits with either 1099 or K-1 reporting were the norm, and are still required to make sure investors receive their tax write-offs.
I discovered the best time to sell oil and gas assets were and are when optimal conditions exist to do so…such as when production revenue has significantly declined, and the oil and gas field, or the market timing or oil prices warrants or strongly suggests selling assets to realize maximum profits, and allow investors to make the most on their investments.
I now work as an advisor and consultant with qualified, sophisticated, accredited investors and with industry people. I like to see 81.25% net revenue interest (NRI) leases offered by operators with reasonable lease operating expenses (L.O.E.’s). This policy enables oil & gas investors their best chance to make money in investment drilling opportunities.
The objective is to consistently find and produce commercial quantities of oil & gas in areas where the best operators work. It’s good to see 75% of the working interest is paid to investors though this isn’t always possible. A good oil & gas team includes field, and staff personnel who have the most experience and knowledge in the areas where they focus.
Prior to working with the big brokerage houses in 1983, I graduated from Eastern Washington University in 1971, and completed the ROTC Flight Program at EWU. I later flew with private corporations, in the Tuna Industry in San Diego, for Petroleum Helicopters in Louisiana, and with Cascade Airways in Spokane, after my six year military service commitment ended in 1977. I’ve developed raw land in real estate deals, and owned and managed apartments, and houses. From 1971-1977 I was a US Army Infantry and Cryptology & Electronic Warfare Intelligence officer with a Top Secret Crypto Security Clearance. I was a pilot in both fixed wing, and rotary wing operations, and spent 27 months in Southeast Asia in the early seventies while flying V.I.P., ARDF intelligence missions, and Special Black Operation assignments through-out Thailand, Cambodia, and Viet Nam. I received an honorable discharge as a Captain when my expiration term of service or (ETS) was completed at Fort Lewis, Washington in 1977.
Dennis W. Stutes
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