I own oil & gas working interests in a few wells in Rusk County, Texas. These working interests are the remnants of a $300,000 investment that I made with Striker Petroleum in their Brittany Program in 2006. It turned out to be a Ponzi scheme with the initial promise of a 12% annual return. Those returns lasted about a year, then quickly dried up with meager or no returns after that. Long story short, that whole Striker Working Interest Program, along with a few other Striker Working Interest Programs went into receivership in 2011. According to the receiver’s report & SEC, all the investments were then worth about 5% of what investors had paid. Farmers National Company was appointed as agent to manage the Brittany properties. In 2016, Farmers sold about 85% of the Brittany properties at auction and the investors received “pennies on the dollar” of their original investment. In 2018, Farmers tried to sell the remaining properties, but could not find a buyer. Farmers then resigned as agent, citing the lack of production could no longer warrant the cost of managing the assets. I have annually filed Texas Franchise Tax & affiliated reports and maintained two resident agents at an annual cost of $238 a year. These remaining properties in Rusk County are worthless! There is no production. If Farmers could not find a buyer for cumulative working interests of about 25 investors at auction, there’s not a chance that I could find a buyer for my share alone! Now with Covid 19 and low price of oil & gas, I don’t see this changing for years to come. I want to dissolve my G.P. & LLC entities and walk away from what’s left of this disastrous investment! Any thoughts or inputs would be greatly appreciated!
You need to get legal advice from an oil and gas attorney (who is experienced in oil and gas operations) on the consequences of dissolving the legal entities as liability may pass to you individually. Attorney will need to review the terms of JOA and any other documents you signed relating to the investment and the unit(s). Attorney may need to know whether the wells been plugged and what company is the operator of record with RRC. If there is no production then the underlying leases may have expired, depending on whether leases are HBP by other production and the terms of DPU.
I strongly second the prior post regarding seeking experienced oil and gas counsel. If you terminate the entities, the assets are required to be distributed to the owner or owners of the entities and you may up up with personal liability. Paying the annual toll to maintain the entities may be the safer play, but that is why you need legal counsel.