03/19/2025
Worth sharing
And in the same vein of the previous post, Iām not stopping anyone from investing. I know I have a track record of helping people win in the wealth game. I sure ānut have plenty of receipts.
But when I warn people that a particular investment is a scam, I have been accused of not wanting people to prosper. BOL - silly rabbit, Iāve spent most of my adult life helping people learn about investing and business mastery. If I was selfish, I would and could have kept building my own empire in silence and I didnāt have to EVER share anything. If thatās the case.
But what I know for sure is that people donāt ask the right questions. Often times itās because we donāt even know what questions to ask. I was included in that.
I only learned this after making an investment, actually it was two large financial investments we made just because our pastor told the leaders of the ministry to do so.
That should have been the first red flag š©.
This well known gospel artist, who was friends with then said her cousin was standing in front of a faucet and was praying and oil started coming out. He needed investors to start the drilling process. So, she called her pastor friends and then they got others to āinvestā.
Now by this time (because they got me on other deals that didnāt pan out) - I passed on this āfaux opportunityā. I had started asking questions and EVERYONE got mad at me for asking them but guess what? I was $30K richer than the rest of them because I asked the questions Iām going to share with you and made the qualified decision to not give these bozos my money.
And as it panned out, no one ever got paid from this investment.
When you are approached to invest in an exploration deal for oil or natural gas, you need to ask strategic questions and there are documents that the company who is raising money for exploration to give you. Know this from the beginning.
Now, here are the questions that saved me from yet another scam.
Oh, and by the way - I have had several conversations with the SEC. They have told me on numerous occasions that scam artists LOVE coming to churches with their scams because they know church folk will believe anything if you quote a few scriptures and they will not ask any questions. I found this to be true on many occasions.
But, please be an informed investor.
So for oil and natural gas exploration investment opportunities, ask the following questions. Now this isnāt all inclusive but itās a great start if you donāt know what questions to ask because investing in oil and gas drilling opportunities can be lucrative, but itās also high-risk and often targeted by scammers. Before investing, you should ask critical due diligence questions and ensure the company provides key information that demonstrates legitimacy.
Hereās what to ask and expect:
1. Who is behind the investment?
What is the companyās name, and where is it registered?
Who are the key executives, and what are their backgrounds in the oil & gas industry?
Do they have a track record of successful drilling projects?
2. What type of investment is this?
Is it a direct participation program (DPP) where investors own a stake in the well?
Is it a limited partnership (LP) or a royalty interest?
Is this a publicly traded company, private company, or speculative wildcat drilling venture?
3. What are the specific risks involved?
What is the geological assessment of the drilling site?
What is the probability of hitting productive reserves?
Has the site been independently evaluated by a qualified petroleum geologist?
4. What are the financial terms and exit strategy?
What is the minimum investment requirement?
How long until I start seeing returns?
What are the expected production timelines?
Can I exit my investment at any time, or is my money locked up?
5. What are the tax benefits and obligations?
What tax deductions, if any, are available for intangible drilling costs (IDCs)?
How will the investment affect my tax liability?
Will I receive a K-1 tax form (for partnerships) or 1099 (for royalties)?
6. What is the legal structure and compliance status?
Is this investment registered with the SEC or state securities regulators? THIS IS A VERY IMPORTANT QUESTION TO ASK!
Are they following FTC and SEC compliance guidelines?
Have they provided a private placement memorandum (PPM) or any required disclosures?
7. Who controls the operations and financials?
Who is drilling the well?
What companies are involved in operations and management?
How are revenues distributed?
Can I independently verify production numbers?
8. Are there any past lawsuits, bankruptcies, or complaints?
Have any lawsuits or regulatory actions been taken against the company?
Have the executives been involved in previous failed oil ventures?
Key Information a Legitimate Opportunity Should Provide You. If they can provide this - donāt walk away, RUN! Because THAT ANOINTED CHRISTIAN ARTIST WHOS COUSIN WANTED MY MONEY TOLD ME I HAD NO FAITH IF I NEEDED THESE DOCUMENTS, and ummmm I responded accordingly, lol.
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Third-party Geological Report: Independent verification of drilling potential.
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Investment Prospectus or Private Placement Memorandum (PPM): Detailing risks, terms, and structure. (He didnāt even know what a prospectus was) - red flag š© #2.
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SEC or State Registration Filings: If the investment is not registered, thatās a red flag š©
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Drilling and Production History: Data on previous wells and projected success rates.
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Clear Breakdown of Costs & Returns: What percentage of profits go to investors vs. management fees.
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Legal and Tax Documentation: Tax treatment, liability protections, and partnership agreements.
Red Flags to Watch Out For:
šØ Promises of guaranteed high returns (oil & gas investments are speculative).
šØ High-pressure sales tactics or time-sensitive āurgentā deals. I hate when people try to pressure me with an investment. This is ALWAYS a red flag š©
šØ No verifiable third-party geological assessments.
šØ The company refuses to provide SEC/state filings or audited financials. Because numbers donāt lie, people do.
šØ The company discourages you from doing independent research or talking to your own financial/legal advisor.
Bottom Line:
Oil and gas investments can be profitable, but only if you fully understand the risks and can verify the legitimacy of the opportunity. If someone canāt answer these questions transparently, then do like Roberta Flack sangā¦.WALK ON BY!
