Oil and Gas Investments; Questions Asked and Answered:
The questions below are typical from potential Investors seeking to know more. Reference to certain information can be found in the Trinity Prospect Geological Report.
Q: What is our biggest risk other than the initial amount invested?
A: The biggest risk is a dry hole. In that event, the entire amount invested is tax deductible in the year incurred. Carry over is allowed. In the success case, still a large majority of the investment is deductible in the year incurred, I’m referring to Intangible Drilling Cost (IDC’s). The balance of the investment consists of Tangible (Drilling and Completion )Cost which is depreciated over the useful life of the equipment ( typically 3 – 7Years).
Q: How has risk of dry hole been managed for the Trinity Prospect ?
A: MPG has proven in advance of drilling the presence of hydrocarbons and charge in the targeted pays sands. Our 3D seismic data reveals ‘bright spots” which are direct hydrocarbon indicators. They have been verified with 3 different algorithm attributes. Reservoir charge has also been proven as we located the source rock. The geochemical analysis shows it to be an active ‘kitchen’ cooking hydrocarbons and lying within the mixed, oil and liquids-rich, natural gas window.
Q: After the initial investment, are there additional funds I will be responsible for?
A: After drilling operations are completed, the Trinity Test Well will be evaluated for its potential to produce oil and natural gas in commercial quantities. Wireline Logs and Core Samples will be taken. If the results are positive as we suspect they will be, the well will be prepared for production. At the casing point, Completion Funds will be due. The amount is about 1/3rd of the initial investment.
Q: Are the returns paid on a monthly basis, quarterly or semiannually?
A: Monthly distributions are paid and a Joint Interest Billing Statement rendered detailing oil and gas sales, taxes and lease operating expense.
Q: Are we able to discuss the project with others?
A: Yes, of course, but we must obtain the Trinity NCNDA (confidentiality agreement) first.
Q: How long might it take to get our initial investment back? I understand there is no guarantee, but an estimate would be helpful. Is there a limit of revenue we get after the principal is returned?
A: You will receive your proportionate share of revenue from the well on a monthly basis for so long as the production exist and the return is not copped. The calculation of Payout and Reserve Valuation is shown in the Trinity Prospect brochure.
Feel free to ask any other questions you may have in the Comment Box below.