Small oil and gas companies will almost always need a cash infusion to get them through the completion of various phases of their projects. If you’re not publicly traded on any exchange you will have to fin oil and gas private equity funding. However, you will definitely need to prepare yourself for a rigorous review process.
You can raise money through various means. You can do what is called a private placement. This is where you offer securities either in your company or in a particular project. Project based offerings are normally in the form of partnerships.
You will need to take special note of state and federal securities rules when offering any type of security. You’ll inevitably need the expertise of an SEC attorney. You’ll find many issues that need be covered when doing this.
You might be thinking of raising money from selling over riding royalty interests. You could package up your working interest with a royalty interest. No matter how you do it each will have different benefits.
You can seek the help of private equity firms that will analyze your potential project. Analysis will include geological area reports. They will want to judge the potential for success in drilling an oil well.
Many of these firms have a group of investors or a fund that invests specifically in this sector. When looking at these companies you must consider many factors. You will need to look at how much you may be giving up in order to get the money you need.
If you give away too much for initial money upfront, your long term profit potential could be diminished. Always seek the advice of a an oil and gas attorney before agreeing to anything. You’ll probably find yourself in need of a securities specialist also. However you decide to go, unbiased advice will be critical to your safety and success.
Learn more here: oil and gas private equity