Wondering about REEG

Shales Bakken Shale
#1

Hi

I am new to this type of investment and so new to this forum as well. I've read with interest the previous posts as I did some searching on Reef after investing what was for me a good sum of money into a Reef solicitation for funds via one of my financial advisors. This was for working interests in the Bakken Sheild in the Williston Basin in N.Dak. Then....I searched the web and found this discussion and disturbingly postings from law firms ooking for folks who have invested in REEF and apparently lost their shirts...although it appears they were looking to sue the advisors for lack of disclosure on the risk of the investment.

So before I run to the bank on Monday morning to stop my check I was wondering if any of the participants in the prior discussions had any further insights on this company and it's bonafides?

#2

These forums are mainly for owners of mineral rights and not speculators in risky REEGs!!

#3

Search Reef on these forums, there is a member here who started some discussions, on the Bakken Shale forum. Find the threads and look at posts from the fairly recent past on the Bakken shale forum. The description of what Reef is doing didn't sound reasonable to me, the buying of 300 wells and drilling 400 more ? Someone brought up the fact that Reef had $22M [ not enough for 3 good Bakken XXL wells ] production in 2010 and I brought up the point that I'm sure Reef is insulated from any loss but I'm sure will take a large slice of any profit should there be any. Frankly, I would not invest with anyone who isn't sharing the risk as I don't feel they have the proper incentive to make the most prudent use of the money. If you are not obligated and feel you haven't given this matter enough study, I would definitely not go forward. Good luck

#4

I don't find your comment particularly constructive and actually pretty abrasive. I was approved to be a member of this forum and was asking for information if any were willing to share. You are welcome to keep your opinions to yourself on any post I might make in the future.

Dctex99 said:

These forums are mainly for owners of mineral rights and not speculators in risky REEGs!!

#5

I think Mr. Kennedy said it best...lol.

#6

12% with the Fed rate at 0 to 1/4%,,,and banks paying .040% on savings accounts and maybe a Credit union paying 1% on a long term CD...hmmmmmmm;;something fishy to that story??????

#7

I thought it was 19% just 2 weeks ago ?

Joan M Graffius said:

I also invested in the Reef Bakken private partnership. This is a strong partnership and IMO we will do fine. The risks are if the price of oil goes down considerably, or fracture drilling becomes illegal, or other things like this. They have 38 million of capital, but they have a large income from the current production wells, so the drilling of future wells is sound.

They are planning on giving us 12% return on investment during the drilling period and when they sell we should get a large capital gain on our investment. Our income should go up as they get pipelines to move the oil. Right now the cost of transportation is high and as time goes on production and delivery will br less costly.

I grew up in North Dakota and have a similar investment in North Dakota oil. This partnership is 50 years old and has been sending nice money each year. Also have some productive farm land so I am tied close to the state.

#8

38 million is NOTHING in the Bakken; the well I own part of cost almost 9 million with fracing; I hope you know what you are doing; for me ;;if it sounds too good to be true...well...L???????????????

#9

Can you give me a website where I can get more information on this???? Thanks,D.

#10

Here is Reef's web site:

http://www.reefogc.com/

The partnership is private so you will have to find a broker that supports Reef and get the 2011 Bakken partnership information. You could contact them and find out who in your area is one of their brokers. The stock is not traded so unless they open it up for more money you can not get in. To open it up 50% of the partnership has to vote yes to open another offering. Upon death it can be passed on. They plan on drilling for 5 years and then will sell the business.

#11

My understanding is that the second offering is closed and did so rapidly after it was announced as the investment capital came streaming in rather quickly. At this point there is no plan to seek another offering...but, of course, that could change.

#12

This all sounds like Bernie Madoff to me. Is there some way to validate the legitimacy of this investment. I don't consider their website or their broker's word validation. I am afraid that on face value I am with Dctex99 on this one. I am sorry about my comments Joan and hope the best for you and all others in the investment partnership.

Wilson

#13

Well...I hope the naysayers are wrong..only time will tell eh? Perhaps they'll be able to say "I told you so"....and maybe gloat a little. I hope not.

Joan M Graffius said:

I agree. My broker, the nephew, had people streeming in his office to jump on board or add to their current investment on the 2nd offering. I was in Scottsdale last week visiting him and he said he could have found the total first offering of $50 million himself to the close the first partnership, but he just did not have the time. The SEC filing was $50 million so they could not go over that. The first offering was communicated to the SEC to close December 31st. They borrowed $7 million to close the deal on the leases. Their problem now is they borrowed the money for less than 1%, so should they use the 2nd filing money for drilling and keep the $7 million as debt.

I like those kind of problems.

Dave Kingsbury said:

My understanding is that the second offering is closed and did so rapidly after it was announced as the investment capital came streaming in rather quickly. At this point there is no plan to seek another offering...but who knows....

#14

The fracing drilling in the Bakken now costs 6.5 million per well.

"The cost of new wells will drop from the current $8.3 million per well to $7.3 million and later to $6.5 million, said James Volker, chief executive of Whiting, a major Bakken player."

Dctex99 said:

38 million is NOTHING in the Bakken; the well I own part of cost almost 9 million with fracing; I hope you know what you are doing; for me ;;if it sounds too good to be true...well...L???????????????

#15

Of course it all depends on how many frac jobs per well;;Brigham is doing anywhere from 20 to 38 on wells in Eastern Montana, and has now contracted with both Schlumberger AND Halliburton for work as there is a shortage of frac crews. My last well took 2.8 million gallons of water, but they have not announced how many times it was fraced yet; still on confidential, but www.fracfocus.com has figures on content and quantity! One of the major drillers in western ND has its own Frac crew; I don't remember the name.

#16

I almost got conned into one of these deals too just recently until I decided to have someone look at it. The legal language is such they truly don't promise a thing. I would stop payment immediately. How do you know there aren't people on here who don't work for REEF? How do you know people who say it is good on here are real and isn't someone at REEF who setup a mineral rights forum account and found a picture online? I would do strict due dilligence and get a lawyer and an engineer to look at it.

#17

I certainly agree; those promised rates of return are just not logical; Bill Gates would form hundreds of those with his money if they really paid that well; but many people have to learn the hard way!!!!!

#18

What was the name of the company you almost got conned into? I agree with your due dilligence recommendation.

Cara Simmons said:

I almost got conned into one of these deals too just recently until I decided to have someone look at it. The legal language is such they truly don't promise a thing. I would stop payment immediately. How do you know there aren't people on here who don't work for REEF? How do you know people who say it is good on here are real and isn't someone at REEF who setup a mineral rights forum account and found a picture online? I would do strict due dilligence and get a lawyer and an engineer to look at it.

#19

I never said the rates of return were promised. I said they were closing the 2nd offering based on drilling costs and current income would get the partnership 12% return on invested capital. 12% return is not much. I own productive farm land in the red river valley of North Dakota and 12% profit is small if you purchased the land some time ago. I have not seen Bill Gates buying productive farm land in North Dakota for the last 30 years. <smile>

Dctex99 said:

I certainly agree; those promised rates of return are just not logical; Bill Gates would form hundreds of those with his money if they really paid that well; but many people have to learn the hard way!!!!!

#20

That is not how you figure return, but I am charging for any further education...lol. I am meeting with my financial planner next week and will mention this all to him....I can imagine what he will say...lol