- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Investing in an oil well
Posted on 10/15/13 at 4:33 pm
Posted on 10/15/13 at 4:33 pm
I have been approached to invest in an oil well in Southwest LA. Each share is $12,000 and the group wants to raise $500,000 to fund the whole thing. I'm considering investing in a single share.
The company running the operation is Navitas Land and Mineral, and they will be redrilling an existing well that was last used for natural gas production when the price of gas was high and the price of oil was low. Now that the tables have turned on mineral prices, they're going back in to see what's down there.
I'm 28 and my portfolio to this point is general savings, my 401K, and a small whole life policy. Does anyone have any experience in this type of investing? I know it is extremely high risk, but a little mailbox money each month would be nice.
Any comments are appreciated.
The company running the operation is Navitas Land and Mineral, and they will be redrilling an existing well that was last used for natural gas production when the price of gas was high and the price of oil was low. Now that the tables have turned on mineral prices, they're going back in to see what's down there.
I'm 28 and my portfolio to this point is general savings, my 401K, and a small whole life policy. Does anyone have any experience in this type of investing? I know it is extremely high risk, but a little mailbox money each month would be nice.
Any comments are appreciated.
14
Posted on 10/15/13 at 4:51 pm to SetTheMood
Don't do it. It's a borderline scam...your paying for their drilling costs and you will likely never see a return.
Posted on 10/15/13 at 4:53 pm to SetTheMood
You would own 2.4% of the well.
Better hope you hit it big.
Put aside 13,000 and pay an O&G attorney a $1,000 retainer to get you well info, company info, and look over the documents associated with your buy-in.
Better hope you hit it big.
Put aside 13,000 and pay an O&G attorney a $1,000 retainer to get you well info, company info, and look over the documents associated with your buy-in.
Posted on 10/15/13 at 5:01 pm to cwill
quote:
paying for their drilling costs
It's an existing well, they're just going back in. I've seen the geological survey that was performed, and as long as they didn't doctor the findings, it looks promising. I'm aware it would be a very small percentage of ownership, its just so damn tempting.
Would I be better served just putting it on black at the roulette table?
Posted on 10/15/13 at 5:04 pm to SetTheMood
A bunch of my friends have been getting into this or looking into it. Mostly shallow west tx wells. Will most not break even, only guys I know making any $ doing this are investing big and investing in new wells and offshore shelf wells.
Don't quote me but I think its something like 1 out of every 8-9 wells are a producer in LA.
Don't quote me but I think its something like 1 out of every 8-9 wells are a producer in LA.
This post was edited on 10/15/13 at 5:06 pm
Posted on 10/15/13 at 6:40 pm to SetTheMood
How deep is it? I have natural gas wells and can tell you a little more about it.
Posted on 10/15/13 at 7:18 pm to SetTheMood
Who approached you?
Posted on 10/15/13 at 7:29 pm to SetTheMood
What do you know about the company? What are they projecting as net return for a share of working interest?
Posted on 10/15/13 at 7:44 pm to SetTheMood
What is your background?
Posted on 10/15/13 at 8:50 pm to Athanatos
So equity investors bear all their risk? What % is Navitas taking if you guys are footing the bills?
Sounds like a sucker play where the operator can just bail on a well and leave equity investors out in the cold.
If the prospects were that great then wouldn't they just borrow from a bank and not bother to use equity financing?
Sounds like a sucker play where the operator can just bail on a well and leave equity investors out in the cold.
If the prospects were that great then wouldn't they just borrow from a bank and not bother to use equity financing?
Posted on 10/15/13 at 8:58 pm to SetTheMood
I've heard a bit about this
Posted on 10/15/13 at 9:02 pm to SetTheMood
quote:
I have been approached
Why?
Are you a good friend of one of the principals? Why do they feel the need to divvy up the investment in shares as small as 12K?
Posted on 10/15/13 at 9:11 pm to foshizzle
quote:
Why?
Exactly. This is really the thesis of all the other good advice OP has gotten in this thread.
quote:
It's an existing well
Then get on SONRIS and see what it has been doing. See what other wells in the section have been doing.
Sorry, but this just seems like a "doctor investment." Doctors don't know shite about the oil business but they get suckered into these investments all the time because they see their richer friends at the country club barely working and making more money. Most never see a return.
quote:
You would own 2.4% of the well.
You didn't subtract whatever the mineral owner is getting - between 1/8 and 1/4.
This post was edited on 10/15/13 at 9:20 pm
Posted on 10/15/13 at 9:46 pm to LSUTigers00884
quote:
How deep is it? I have natural gas wells and can tell you a little more about it.
Depth is 8,500 to sand and 8,600 TVD. Estimated BPD is 170 and estimated total yield is 250,000 barrels. A family member approached me.
quote:
What is your background?
I'm an ignorant lawyer.
Posted on 10/15/13 at 10:10 pm to SetTheMood
Just be willing to lose it all. Seriously.
500k is pennies in thos industry. Someone would be all the hell over this if their are known reserves.
Just be cautious. Hope you do well though
500k is pennies in thos industry. Someone would be all the hell over this if their are known reserves.
Just be cautious. Hope you do well though
Posted on 10/16/13 at 6:47 am to SetTheMood
Be ready and able to lose it all and a little more for P&A if its a dry hole.
Posted on 10/16/13 at 6:51 am to foshizzle
quote:
Why do they feel the need to divvy up the investment in shares as small as 12K
Not uncommon.. For small time investors get get some of that mailbox money going.
Posted on 10/16/13 at 6:52 am to foshizzle
quote:
Are you a good friend of one of the principals? Why do they feel the need to divvy up the investment in shares as small as 12K?
This. If the offer gets to you then it probably isn't that good of a deal. Otherwise, the big dogs would snatch it up in much, much bigger blocks.
Posted on 10/16/13 at 7:23 am to Janky
quote:
If the offer gets to you then it probably isn't that good of a deal. Otherwise, the big dogs would snatch it up in much, much bigger blocks.
This is true, by the time they get to you it's been passes on by most of the guys that make money investing in oil wells
Posted on 10/16/13 at 7:28 am to cwill
quote:
Investing in an oil wellDon't do it. It's a borderline scam...your paying for their drilling costs and you will likely never see a return.
Page 1 of 3
Popular
Back to top
Follow TigerDroppings for LSU Football News