Oil and Gas Disclosure
Private investments in oil and gas are high risk, including, but not limited to the following considerations:
- Political Risk – Federal or local governments could enact regulations/legislation that could adversely affect the oil and gas industry, thereby negatively affecting your investment.
- Geological Risk – Oil and gas production can be negatively affected by the difficulty of extraction and the possibility that the accessible reserves in any deposit will be smaller than estimated. There is no guarantee that any drilling operation will be successful.
- Supply, Demand, and Price Risk – A reduction in oil and gas prices, a decrease in demand, or a surplus of available supply can reduce or even eliminate investment returns.
- Cost Risk – Unexpected or increased operating expenses can reduce or even eliminate investment returns.
- Dividend Cuts – Any dividend payments can be reduced or eliminated if the company is unable to earn enough revenue to fund the payments to investors.
- Oil Spill Risk – In addition to the cost of repairs, clean up, potential fines, and potential litigation, oil spills can negatively affect the reputation of the company, all of which can reduce or eliminate investment returns.