Investing In Direct Participation Oil And Gas Programs

Why should I invest in direct participation deals vs. buying stock in large public energy companies like Exxon/Mobil or Conoco/Phillips, etc? In this lesson the student will learn more about the advantages in investing in direct participation programs

How is the Net Income from my investment calculated? In this lesson the student will learn about revenue and expenses and how your Net Income is calculated.

How often do I get paid when I invest in a direct participation deal? IN this lesson the student will learn about the income and expense pipeline to understand the payment time-line.

What is the time frame between writing a check, becoming an investor, and when I might see income from production? In this lesson the student will learn about the funding and drilling time-line.

What is a Net Revenue Interest (NRI) vs a Working Interest (WI) and how are these interest percentages used to compute my Net Income? In this lesson the student will learn the difference between Net Revenue (revenue entitlement) and Working Interest (expense obligation) and see how net income is calculated.

Is there any personal or contingent liability I may have as an investor when I invest in a direct participation program? In this lesson the student will learn about the various liability protection levels involved in direct participation programs.

Where does oil and gas come from?  In this lesson the student will learn how the source rock was produced.

Where does oil and gas end up?  In this lesson the student will learn how oil is trapped in formations where we can access it.

What are the most common type of reservoir rock?  In this lesson the student will learn about the characteristics of Sandstone and Limestone to trap and store oil and gas.

How do we know where to look for oil and gas?  In this lesson the student will learn how geologists and geophysicists work together to locate oil and gas holding reservoirs. 

Why is well spacing important to understand? In this lesson students will learn about pay zones and reservoir properties that affect oil & gas field drainage and how these variables factor into the optimum spacing between wells.

How is my investment allocated and what affect does this have on my taxes? In this lesson the student will learn how to read an Authorization for Expenditures (AFE) to see how your investment is allocated and its affect on your taxes.

How long and how fast does a well produce oil and or gas? In this lesson the student will learn how reservoir characteristics affect the production volume and rate of recovery.

Is it risky to invest in direct participation programs and what do I stand to lose? In this lesson the student will learn about the risks associated with direct participation deals.

How do we drill a well?  In this lesson the student will learn how oil and gas exploration companies secure the rights to drill, get it funded, drill a well, and perform tests to determine the quality of the well.

What does it take to get the well producing oil and gas?  In this lesson the student will learn how the decision to complete the well is made and the process of completing the well.

What can go wrong during the drilling and production phases? In this lesson the student will learn what kinds of things can go wrong during the drill and subsequent production phases and and how it could affect your investment.

Are there varying degrees of risk within direct participation projects? In this lesson the student will learn the difference between wildcat and developmental wells and gauge the risk and potential rewards of different project types.

What is secondary or enhanced oil recovery? In this lesson the student will learn about the different types of secondary recovery methods and how they can recover vast amounts of oil and gas still trapped after primary recovery is depleted.

What are the ongoing production-related tax advantages of investing in direct participation programs? In this lesson the student will learn from CPAs and Investors the different deductions available to offset not only production income but other sources of income as well.

What is the liquidity of a direct participation investment? In this lesson the student will learn what options you potentially have if you wish to convert your cash flow annuity to cash today

What are the typical documents I will see and what do they convey about the project? In this lesson the student will learn what is included in and what salient information a savvy investor must understand in each of the many documents presented to him as part of a private placement offering.

How can I determine the potential value or return of an offering? In this lesson the student will learn how to calculate income potential and weigh the risk of an offering to make a go or no-go investment decision.