Oil and Gas Investment Strategy
We combine two key elements to maximize shareholder returns and minimize investment risk.
We will only invest in existing oil fields that have past and/or current production using advanced well drilling and production techniques. We will combine multiple well sites into one drilling/production package that further diversifies the investor over several drilling opportunities.
There are very few "virgin" areas within the Illinois Basin that have not been drilled within the past 100 years. However, production and drilling techniques have significantly improved, especially over the past twenty years. Many geologists believe that up to 70% up the original oil in a particular zone or field may still exist today due to prior poor production practices and that we can recover up to 70% of this remaining oil. Horizontal drilling, chemical stimulation, and water flooding are all modern techniques that can be utilized.
Midwest works for the investor in all phases of oil drilling and production.
Our process is as follows: We first meet with the operator/production company to complete an acceptable drilling package. Estimated costs are determined, and the total amount needed for the drilling package is finalized. All title work is reviewed by Evansville law firm, Kahn, Dees, Donovan, and Kahn, LLP who confirm that the leases show clear ownership to the operator. They also create the new LLC for the investor group for each transaction. Midwest will also confirm that the cost estimates for drilling and completion are at market. All investor funds are placed into an escrow account insuring that the necessary funds to pay the operator are on hand, and that the bills for the wells are within the budgeted amounts. Midwest will then release the necessary funds to the operator upon review of each months expenses, and refund any unspent funds to the investor once the well costs are finalized. Investors are notified monthly regarding the status of the new wells. From the commencement of drilling, the well is completed within 30 days and the first payment to the investor occurs within 60 days of well completion. Payments are made by the purchaser monthly to Midwest; we will forward these payments onto the investors within three business days less any operating expenses incurred by Core or Pioneer. All year-end accounting including K-1's are prepared by an independent CPA firm based in Evansville.
