Frequently Asked Questions
1. What is the ROI that I can expect?
A return on investment of 20% is very realistic, especially with today’s oil prices. The market price used in the revenue calculation is lower than today's price
and thus at the current price your return would be greater. Your actual return will of course vary based on the production rate and the oil price, which are not in our
2. How safe is this investment?
Exploration of oil and gas can involve great risk and subsequent large rewards when and if a production well is realized. Our offering is for a performing well that has
already been developed and which has a proven track record. And due to the fact that we have gone so far as to include an exchange policy in the event
of catastrophic failure, it is very safe. You will not find this kind of assurance anywhere in this industry that we are aware of.
3. How long can I expect this well to produce at current levels?
We do not know of any wells in this field that have ceased production due to dwindling supply. Thus it is premature to place an exact time frame on them. Normally if a
well is properly maintained, you can expect production income for many decades.
4. How do I know the production numbers are actually coming from the well you are offering?
The State of Texas carefully regulates the amount of natural resources that emanate from within its borders. Monthly monitoring reports are required by the Texas
Railroad Commission for each well. There are hefty fines for any infractions. You can request a copy of the production data for any given well directly from the
Commission or we will provide you a copy.
5. Why are you selling the well to investors this way?
We are and have been actively involved in investments in divergent fields, and have always possessed a rather open and creative mindset. We developed a unique
approach for our asset that we felt would pique our interest if we were currently in the market. With the huge losses that many portfolios have experienced with our
challenging economy, this seemed a winning combination for all parties. Independent oil and gas companies frequently fund their future drilling ventures by selling
their existing production facilities.
6. What is the sales price and how was it determined?
Using the base production figure of 4 barrels per day and standard industry multipliers, the fair market value of a little over $270,000 is reached.
7. What maintenance does a well normally require and what percentage of income is it?
A chemical cleaning and well pump replacement are normally conducted about every two years. During that time a complete inspection dictates any additional
equipment requiring repair or replacement. The maintenance cost is somewhere in the area of 5% of gross revenue. The total expenses run between 600 and 700
8. What is a royalty fee?
The oil well is located on land that is leased from the property owner. The mineral rights for the land is often owned by the owner of the property, however they could
have been sold to another party at any time. The owner of the mineral rights for the land shares in the oil revenue. The holder of the mineral rights will usually receive
twenty to twenty-five percent of the oil revenue.
This is not an offer to sell a security or a general solicitation by Big Rock Oil and/or any of its affiliates; an offer to sell a security only may be made by a private placement memorandum to sophisticated and/or accredited investors where permitted by law. The purpose of this website is for general information research purposes with regards to wells owned and/or operated by Big Rock Oil and/or its affiliates. By submitting this request form you are confirming that we have not generally solicited you directly or indirectly whatsoever to invest in any oil and gas prospect; you agree to be sent additional information and/or contacted by phone or e-mail by Big Rock Oil or any of its affiliates. Website content is not meant to be considered financial and/or investment advice.