Oil & Gas Scheme
What is an Oil & Gas Scheme?
The popularity of this scheme rises and falls along with oil and gas prices. Usually scam artists or unscrupulous promotors take advantage of oil and gas booms by enticing inexperienced investors who are unfamiliar with the high risks related to oil and gas ventures.
How Does an Oil & Gas Scheme Work?
Scam artists cold call or email investors with a phony report about a promising opportunity to get involved in an oil and gas limited partnership. They often have legitimate looking websites, well-designed brochures, and research documents. For peace-of-mind, investors are often told that a large oil or gas company has invested in the venture. However, once they hand their money over, it is unlikely they will ever see it again.
Watch out for one or more of these common characteristics:
- Use of terms such as “expert geologist reports” or “tremendous discoveries in the ground at adjacent wells/drill sites”.
- New technological developments credited with facilitating record levels of oil and gas production.
- Promoters who are not registered with a securities regulator.
- A company or investment that does not have a prospectus that is filed with a securities regulator.