Keller #6 Drill Report
Keller #7 Drill Report
How To Evaluate Oil and Gas Deals
Unless you are a geologist or geophysicist this could be very daunting task. However, there is a simple method to help get you started. I always recommend that to properly evaluate an oil and gas proposal, ask three very important questions:
1. Is the offering from a well established company?
Companies that are relatively new may have to change names every few years due to bad reputations or have just started up because of the recent rise in oil prices. Older established companies can remain in buisness because of good reputations and have weathered the ups and downs of prices over the years.
2. Is the company making the offering the operator of the prospect?
If the company making the offering is not the operator of the prospect, then they are just selling you a piece of someone else's deal. Why put a middleman between you and the prospect? This just adds additional costs as well as making accounting for the revenues very difficult.
3. Do you recieve an assignment of interest filed in the courthouse in the county in which the prospect is located?
First of all, would you buy a car without a title? Or a house without a deed? Then why spend this much money for a piece of oil wells without proof of ownership. With an assignment of interest you will become part of this legal chain of ownership to that prospect and you will recieve your revenues directly from the refinery or pipeline company. This is something that can never be taken away from you without your signing off.
If you can anwser yes to all three questions then it is probably a good deal worth looking into. Now call references, such as the purchaser of the oil, the geologist, local oil and gas associations, etc. Check on the reputation of the company with these folks. They may not be able to tell you the veracity of the prospect, but good deals come from good companies.