Dear Oil & Gas Investors, there are several concepts, and important ideas to talk about which give the investor a maximum chance to make money in any private investment offered by oil & gas operators.
1) First, stay away from promoters who know very little about oil & gas day to day operations, or what it takes to succeed but are long on the use of emotion & excitement. Enthusiasm is good, but not hype!
2) Deal with operators who have a successful ‘track record’ they can prove of making money in the past, and have adequate ways to prove it to you. Get sober about this, and make sure this information with names, dates, and places is in their prospectus or memorandum.
3) LOW OVERHEAD is a must to sustain while developing oil & gas assets…I’ve discovered owning drilling rigs, equipment, and having your own employees isn’t the panacea one might think while trying to make big profits for investors.
4) Clear and concise Joint Interest Billings, and production reports which can stand close scrutiny by industry experts, accountants, and CPA’s is a must, otherwise you simply don’t know if you are ‘getting your own money back as part of a ‘Ponzi scheme’ frequently used by promoters to sell deals.
5) Diversification is good when investing in multiple wells, and oil & gas leases, but not if the costs to acquire leases, and maintaining them is cost prohibitive, and doesn’t allow the operator to make and pay profits above expenses…or in other words, more isn’t necessarily better.
6) Experience by the people offering private oil deals is mandatory but must be proved to be legitimate representations by promoters…there are simply too many promoters who say they have experience at making money for private investors but really don’t, and can’t prove it either.
7) If you don’t follow the rules & regulations under the appropriate securities laws of the country, the deal is doomed to failure.
Promoters who make claims of wonderful performance or success are easy to prove or disprove, but only if they provide audited financials among other checks you should make. Don’t settle for hazy or cloudy claims in this area of great importance. Production deals are hard to find, and when found, the acquisition costs keeps the returns to investors low. If low returns are not a problem fine, but the new drilling is where the profits if found will come from in oil & gas development operations.
9) There is no reason not to release production data from oil buyers, or companies who buy the oil produced by independents. This information can be used to determine profits after expenses…you’ll find this hard, or impossible to get from the promotion companies or scam artists who don’t want accurate tracking…and/or who often don’t know what Joint Interest Billings, or Joint Interest Operating Agreements (JOA’s) are, and why they are important to all industry professionals in the business.
10) People you can trust don’t change their stories each hour, or day to get you to buy…nor do they flip you from a so called expert to another so called expert…this is standard ‘boiler room protocol’ and is nonsense…don’t fall for it. Real people are willing to invite you to their homes, and their offices…not just the field where a ‘controlled environment’ exists…
11) Making changes to take advantage of new opportunities is fine…but only if you know what you are doing…for example drilling dry hole after dry hole when the electric logs show marginal production potential isn’t what the major’s and large independents do. They stop drilling in an unproductive area, and move to one with more potential while trying every new technology they can prove.
Call me with any questions about our current operations, and success, etc.
Sincerely,
Dennis W. Stutes, Manager
Oil & Gas Cutting Edge Technologies, LLC
Owner, Elco Oil & Gas, LLC
Tar Water Oil & Gas, LLC, TOG Operator
408 975 0800 Cell: 805 701 7761
16 East 16th. Street
Ste. 401
Tulsa, Oklahoma 74119
http://www.oilandgasinvesting.com