Quote:
Originally posted by wcc
The company buys real estate for oil exploration. They have offices here (MI), TX, LA, FL and some other places. Apparently from what I have heard through the grapevine, no real facts on this, but they made a bad purchase and there wasn't the amount of oil they thought was there. So now I do know that they are trying to sell the property. They keep tell me about these buyers and they string me along for months and then the deal falls through.
Now with the oil companies recording largest profits in history this company can't pay back investors. Just doesn't seem to add up for me.
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When did you make your investment? If they were buying oil leases when oil prices were higher, those leases could now be near worthless since the price of oil has backed off its highs.
There are lots of places where there is oil in the ground, it just hasn't been worth the costs to drill and pump it out until recently when oil had its rally. If this company was buying high cost oil properties, now after oil prices have dropped back down, they are probably holding properties that have very little value.
If they can afford to continue to hold the leases they own, and if the price of oil goes back up, you might make money on your investment.
Of course, I'm still not sure why they needed you, or your accountant or lawyer, -- who I assume are not experienced investors in the oil industry -- for investment capital?
When you have people "promoting" to "the public at large" an "investment" in a sector of the economy that already has a great deal of professional investors in that sector, you need to be
very careful about making any investment. If they couldn't sell their idea to the professionals already in the industry, and instead are looking to the public at large for capital, their idea probably represents a pretty poor "investment." The professionals in most industries know what works and what doesn't; they know the risk factors the "new ideas" present -- if they avoid an investment, chances are you should too.