WHAT IS THIS TYPE OF INVESTMENTS?

Oil Estates invites co-investors to join the company in acquiring large participation percentage in various Oil and Gas Exploration and Production Projects, packaged into a comprehensive Oil Estates Oil and Gas Wealth Management Programme. The total investment in this Programme is divided or fractionalised into small amounts called "Fractions" for investment purposes. All Fractions will have a legal Mineral Title working interest assignments issued by the respective U.S. County Office where the projects are located.

WHAT IS THE MINIMUM AMOUNT FOR THE INVESTMENTS?

Oil Estates make it easy for small retail investors to participate in its Oil and Gas Programmes by fractionalising the total investment into smaller Fractions of US$12,000 each. Large institutional and high-net worth investors can take multiple fractions or even whole projects.

IS THIS A RISKY INVESTMENT?

Oil and gas investments, just like any other investments, all carry some degree of risk.  Oil and gas exploration investments can be riskier than other investments mainly because most of the investment is spent on drilling the well and cannot be recovered if the well turns out to be dry (no oil or gas) or not economical to produce.

However, the level of risk may very well depend on how the project is structured and who is the developer/operator.  For example, such factors as the type of drilling for example horizontal drilling or the use of 3-D seismic surveys before drilling can minimise the risk greatly

Most experienced investors who know the oil & gas exploration industry spread their investment risks over a large project that covers many wells, typically more than 10 to 20 wells per project. The current investment-risk trend is towards investment in a large portfolio of multiple projects of multiple wells in several locations. This maximise overall returns and greatly reduces risks.

Some developers such as Oil Estates package large drilling programmes with a few projects each having at least 20 wells in different locations and with different operators to manage these wells and drilling programmes. This package generally reduces risks tremendously for investors

If the well is considered a wildcat (wells drilled in an unproven area), this type of well may have a much higher risk.  If it is an inside or redevelopment well, this type of well may have a major impact to lower the overall risk.  Of course, if you participate in a programme that has some existing wells, there is definitely going to be immediate income from those wells with proven reserves.

Oil Estates has put together a carefully packaged programme of 4 separate projects consisting of:

1) A group of existing wells for immediate income
2) A group of multi-wells project to be drilled using latest technology such as horizontal drilling, 3D seismic, well-logging and frac techniques in a proven and still active oil and gas producing area where large multi-national companies are still operating. Proven area means that oil and gas has been produced. These wells often targets areas not been drilled or at depths that have never been drilled before to reach the hydrocarbons (oil & gas) rich earth layers. In the past, many existing proven areas are abandoned as they depleted the shallow layers but not the deeper ones since they do not have the current technology to drill to those depths or able to exploit them using horizontal drilling and other latest exploration techniques.
3) Two separate groups of multi-wells projects in separate locations by different operators in proven oil and gas proven areas where there is little drilling on the acreage that we intend to develop. In most cases, we go for areas with exploratory wells drilled before to confirm these reserves or we will spend money to do 3D seismic shoots before big drilling investments.

If you work with an experienced developer/operator who develops projects containing multiple developmental wells, and prices the investor cost in such a way that the Investors profit is a major consideration, you generally will find such a project to be much lower in risk, fundamentally fair and can potentially be highly profitable.

CAN I LOSE MY MONEY?

If you invest for single well project, you can lose a lot, if not all of your investment because of the possibility of hitting dry well. This will not be very encouraging for first time investors. That is the reason why most experienced investors go for multi-wells projects and spread their risks over several such projects.

In a small project of say 10 or 20 wells, your chances of losing money are lower. There are still risks of not achieving your targeted profits. But losing all of your capital is quite unlikely unless all or most of the wells go dry.

If you go for a multi-wells, multi-projects, multi-locations and multi-operators programme put up by Oil Estates, the likelihood of you losing money is very low.  Generally speaking, the only way you can lose your money is for every well drilled to be dry wells.

For that reason, Oil Estates is able to guarantee at least the capital invested over a certain number of years subjected to some conditions of oil and gas prices, production figures and number of dry wells.

WHEN DOES OIL ESTATES PLAN TO START DRILLING MY WELLS?

Generally within 60 to 90 days after funding is completed.  (Rig availability and weather permitting). It is our interests as well as our clients' interests to start drilling as soon as possible. In a multi-wells project, once there is enough money to start drilling the first well, the drilling will start instead of waiting for all the money to be raised.

HOW LONG WILL IT TAKE OIL ESTATES TO FINISH THIS PROGRAMME?

Oil Estates will launch each project strategically and once each funding phase is completed, that project can start immediately while funding is raised for the next phase until all the designated projects in the programme are completed. Generally, once the drilling begins, each successful well should generally be completed, equipped and producing within 60 to 90 days (Rig availability and weather permitting). As each project come on stream with income streams generated from the oil and gas produced from the wells, the income can be immediately distributed to the early investors. Investors that come in later will also get to share the profits in the earlier projects as long as they are part of the same Programme.

WHEN DO I START RECEIVING MY REVENUE CHEQUES?

Your first monthly cheques should be delivered to you by mail in the 4th month upon investment regardless if the well production has begun.  This will be in accordance to the special payout plan as promoted by Oil Estates.

Over a 12 year period, there will be a guaranteed fixed monthly payout after the first 3 months of investment; and a variable monthly payout after the first year and 3 months; followed by a variable monthly payout if the wells are still producing.

Briefly, the Payout Plans are:

1) Registration Period: First 3 months - No payout (registration/administration)
2) Stable Payout Period: First Year - Fixed monthly payout at 8% per annum.
3) Capital Recovery Period: Between 2nd to 5th years
      - Variable monthly payout targeting at 10 to 20% per annum
4) Residual Period: Variable payout according to the production of the wells. As long
    as there are still wells or even a single well still producing, its proceeds will be      distributed to the investors. That means You will receive money from all producing      wells in your project for the entire life of the wells.

All net payments to investors are less US taxes, royalties and developer and operator expenses.

Oil revenue income from the wells is paid in the arrears, for example:  First month production is paid in the second month, and the second month production is paid in the third month, and so on. For gas revenue income from the wells, they are paid two months in arrears. These revenue income from the wells will be used to pay the fixed and variable payout in the Payout Plan. As far as investors are concerned, all investors in the Oil Estates Programs get their first pay cheque on the fourth month from their investment date - i.e. the Stable Payout Period.

WHY IS THIS INVESTMENT UP TO 100% TAX DEDUCTIBLE FOR U.S. CITIZEN?

It is the U.S. Government's way of rewarding U.S. Citizens for helping the United States combats its dependence on foreign oil.  (The benefits and tax deductions can vary from Client to Client). Unfortunately, non-US Citizens will not be enjoying this tax deduction.

WHY ARE OIL ESTATES PROGRAMS STRUCTURED AS A REDUCTION OF REVENUE INTEREST TYPE?

Because it is one of the fairest and safest forms of oil and gas investments for the Investor.  Oil Estates is the Leader Investor as well as the Developer of the project. Simply put, Oil Estates Pte Ltd will receive 5% from the production of the Partnership ownership in the wells until after all Investors receives 100% (Capital Recovery) of their investment back. Then the income is split, 15% Oil Estates and 85% Programme Investors, for the remaining wells' productive life.

HOW LONG WILL IT TAKE ME TO GET MY MONEY BACK?

Each programme is different.  Many things could have a material impact on the actual time, such as production, sales markets, operating cost, and oil and gas prices.  It is Oil Estates' desire for each Investor in the Programme Investor to return back 100% of the investment in a 3 to 5 years' time frame.

HOW MANY YEARS COULD I RECEIVE CHEQUES?

This question is impossible to accurately answer.  We anticipate drilling wells with a productive life projected up to 12 years to as long as 25 years. Some wells are still in production for 26 years in the areas that we are targeting.

IF THIS IS SUCH A GREAT DEAL WHY DO YOU NEED ME?

The funding of this project is through a private equity offering.  All energy companies use investor funds to develop their wells from one source or another.  Even large oil operators ExxonMobil or large US domestic operator, XTO uses investors' funds.  Oil Estates Pte Ltd would rather have pooled its resources and funds with its co-investors' funds so that it can have a larger economy of scale, better negotiation power with operators and prospect holders and take on larger programmes such as multi-wells, multi-projects, multi-locations and multi-operators to greatly reduces risks and increase profits for all investors including Oil Estates.

WHEN AND HOW DO YOU DETERMINE WHEN IT IS NO LONGER ECONOMICALLY FEASIBLE TO CONTINUE PRODUCING A WELL?

When the well's operating cost exceeds the income from production.  In the areas that Oil Estates are drilling, usually a well's operating cost is reasonable low - that means it would only take a small amount of oil or natural gas revenue to pay the monthly operating cost and all other oil or gas sold would be the profit for that month to be shared by all investors according to the amounts invested.

HOW DO I RECEIVE THE INFORMATION TO DEDUCT THIS INVESTMENT FROM STATE AND FEDERAL INCOME TAXES?

Our office will send a (K-1) to each qualified investor each year. This is for US citizen only.

WHY DO OIL ESTATES PROJECTS HAVE MULTIPLE WELLS IN THEM?

To reduce investor's risk:  In any oil and exploration project, no matter how good it looks, it is possible to hit a dry hole or a well having low production economy.  In a project with multiple wells, if one well is dry the other wells could still allow the Investor to get a full return of his capital in a reasonable time and then make a profit.  The risk for small wells project can be high. That is the key reason why Oil Estates promote its programme of Multi-wells, Multi-projects, Multi-locations and Multi-Operators to spread risks for its co-investors.

Remember, Oil Estates, besides its own working interests ownership, only participates in the Programme Partnership's ownership share of well production after each and every Investor receives back 100% of their investment.  We intend for your project to be successful or we lose also.

AM I BUYING INTO OIL ESTATES PTE LTD OR JUST THE WELLS IN THIS PROJECT?

You are buying in the Working Interests in only the wells in this programme. All Investors will receive the Working Interests Share(s) Allocation for the project. As each project gets started, all investors will get their Working Interests adjusted every 3 months so that they will get their share for all the projects in the Programme till all the projects are completed. The adjustment will be administered by lawyers and auditors to ensure transparency and security for all investors.

HOW MUCH OF MY INVESTMENT PORTFOLIO SHOULD BE IN OIL AND GAS?

Most experts agree that a prudent Investor should have 15%-30% of their investment portfolio in energy.  Considering the upward trend of oil prices and the current longest and most sustaining bull run on oil prices, many investors hedge their investment portfolio on energy to offset inflationary costs.

Remember, diversity is usually the key to safety and success.

WHAT EXPERIENCE/CREDENTIALS DOES THE MANAGEMENT OF OIL ESTATES HAVE IN THE OIL AND GAS INDUSTRY?

Simon Beh, the Managing Member of Oil Estates Pte Ltd, has been involved in the oil and gas industry for the last 15 years and has extensive contacts in the industry. He works closely with experienced, ethical and proven developer/operators of oil and gas wells in the US States of Mississippi, New Mexico and Texas.  Simon is also the current US State Representative for the State Economic Department of New Mexico and the former State Representative in Asia for the State of Mississippi's Mississippi Development Authority promoting trade and investments for the states. Some of the companies he helped are oil and gas companies.

IS THIS THE RIGHT TIME FOR ME TO MAKE AN INVESTMENT IN ENERGY?

We at Oil Estates certainly think so.  With the uncertainty in the world and the current skyrocketing oil prices; the huge demand from China, India and the rest of the world; and global growing dependence on oil, the time is right... and the time is now.