Participate on an actual cost basis.Typically, upon Subscription, Drill & Test expenses are collected based on a cost estimate from the operator (“AFE” Authorization For Expeditures). The decision to complete a well is made and collection of those expenses is usually due within 10 days. In some instances, completion funds may be collected up front too. All Operating costs are proportionate to Working Interest purchased.
Typically our turnkey offerings will be at a fixed price to the tanks for a specified scope of work. After initial flow to the tanks, the costs are proportionate to Working Interest purchased. Funds may be collected all at once, but if completion is not attempted, those completion funds would be returned with any overage or underage accounted for on the D & T side.
From time to time, we may offer an opportunity to share the risks in a Seismic shoot. Typically the rewards for this are in first right to participate on wells found in the seismic region, an elimination of Back-In, and/or Lower G & G costs.
From time to time, we may offer an opportunity to participate in a lease company where participants can contribute up-front money to acquire leases for future exploration and/or development and enjoy a better net revenue interest.
From time to time, we may have production opportunities whereby the company will have obtained interest, either royalty interest or working interest that may be available for sale to its preferred investors.
From time to time, we may see a situation where a company is in a bind for cash and they decide to sell excess pipe at salvage value. When we see that opportunity, we may decide to acquire the pipe and rework it for another project or sell it to another operator. The same thing can be said for compressors. Purchasing assets such as these in down times with the expectation of a need in the future can provide some nice and relatively low risk opportunities. We look forward to more of these in the future.