Dennis Stutes Dennis W. Stutes Oil and gas scam Ripoff artist bogus Internet

On June 18, 2012 I posted individually and as Manager of New Hi-Tech Oil & Gas Discoveries, LLC a lengthy rebuttal to the anonymous posting about me and New Hi-Tech. I've stated therein that anonymous postings are inherently unreliable.  

Predictably, the anonymous person has not posted a response to my rebuttal because, to do so, he would have to claim authorship of his original false and misleading posting, and thereby waive his anonymity.  Hiding behind anonymity is a cowardly act on his part, which evidences the falsity and maliciousness of his original posting. Accordingly reliance upon his posting is unwise. You may contact me for further information about the anonymous person's original posting, or my rebuttals to same.  Dennis

Stutes, Manager, New Hi-Tech Oil & Gas Discoveries, LLC, www.oilandgasinvesting.com.



 

June 26, 2012

Oil & Gas Investing & Critical Facts to Consider By Private Investors Prior to Making Any Investments

Remarks follow by a Licensed bonded Operator in Oklahoma.

Private investors are at a severe disadvantage when trying to discover how best to perform their due diligence when looking for legitimate oil & gas investments with a reasonable chance for success for a multitude of reasons, of which most are valid reasons to carefully consider before investing.

First, you must be able to establish trust in the integrity and ethics of the people you are considering doing business. The government cannot help you do this simply because they dont have the staff, or directive to pass judgment on the merits of any oil deal. The government is only concerned with issues of accreditation, or suitability of an investor, and
whether an investor is provided with full disclosure about information of record about a company or individual. This can be somewhat checked by using material found in the memorandum or the four corners of the only contract
which really counts and by using outside sources such as noting whether a private placement memorandum (PPM) has been prepared and reviewed by licensed securities attorney, and not a disbarred attorney. This means looking for the
Federal Form D. filings, and U-2 state filing on a state by state basis, along with making sure the Limited Liability Company (LLC) has a Federal Identification Number (EIN) and the attorneys name and at least a contact
address is included in the PPM.

Experience must be verifiable before proceeding further with a promoter, sponsor, issuer, broker, Operator, or anyone professing to know the oil & gas business inside and out. This is harder to establish, but ask for track records, good or bad, and there should be both in my experience. No-one succeeds all of the time in this industry as a developer, etc. Frankly a good baseball player is paid millions for hitting 3 in 10 times at bat for example.
Our congress does even worse

Exploratory oil drilling programs or those drilled more than 1 mile from known production or well control established with other productive wells, can succeed about 1 in 8 times, sometimes worse, sometimes betterre-entrys to capped, or plugged wells, or work-over operations can be hit or miss depending on the age of the oil wells, and condition of the oil
& gas fields.

Previous Operators can and do leave trash in the boreholes, which is nearly impossible and very expensive to removerequiring for example impression blocks, fishing tools, spears, and all kinds of work to include drilling to remove bridge plugs, tubing in the hole which blocks going down any further; ostensibly of course to open a so called previously ignored zone for reasons of two much water, and economic reasons related to lower oil prices, or newer technology now available to exploit an abandoned zone.

Investors and developers who are honest want a successful outcome in an oil developmental venture. This can be doomed from the start if there is no oil in a given zone, or quantities are less than commercially successful when removed, and subsequent costs go beyond a reasonable budget to insure a return of capital, and a reasonable return on investment (ROI). Adding-in the tax write-offs to skew, or weight the investment may help, but in my experience investors dont want to acknowledge these benefits when their investment returns are less than expected, or less than forecasted, and projected. Everyone gets selective memory lapses in their memories when their oil & gas investment they make goes south. That said, here are some more reasons Operators have head-aches, lost hair, and arguments with their spouses, and significant others

The EPA, OSHA, OCC, plus local state, and county offices with jurisdiction can make the lives of an Operator very, very difficultsimply using just one example; because spills of formation water or salty water can cost hundreds of thousands of dollars to clean-up, and investors dont want to pay for these costs. The Operator doesnt have unlimited funds, and insurance companies eventually cancel when too many claims coming from too many directions occur repeatedly. OSHA handles work field accidents, and determines whether there is Operator negligence in warning, training, and making sure oil field workers know the rules, and dont violate them. Frankly, Ive had good results with OSHA, as the office in Oklahoma does good investigative work to determine who is at fault, and typically it is the oil field worker who is
putting himself at risk by unprofessional behavior such as smoking around an oil field, believe it or not.

Sub-contractors, and vendors with false, or padded invoices can be a real nemesis for Operators. As an Operator Ive fired people on the spot for standing around and doing nothing while being charged for each of 4 people supposedly doing a job that either was being done poorly, or not at all. Unfortunately, Operators can have real problems contesting an incorrect invoice for work a sub-contractor tells you they performed. Accusing them of incompetence doesnt get you very far at all. The sub-contractor has a real hammer; in they can file a lien against your oil lease, and hold-up your production. You can imagine investors would not appreciate or understand this issue.

Drugs are a real problem in Oklahoma and other areas. Crack Cocaine, Oxycoton, Marijuana, and alcohol use by oil field workers who are often poorly educated, and really at the bottom of the food chain can cause any number of problems, to include; wrecking your rolling stock, breaking your equipment used in the field, destroying motors, and pumps used in the oil field, and will sometimes steal equipment, or destroy equipment, or even steal oil from tank batteries, when they feel they should be paid for shoddy, or poor work. Oil field workers will file false claims for frivolous reasons, such as,
fake injuries, while they file unemployment for benefits when they are fired by an Operator. Sub-contractors wont always accept personal responsibility for people they hire.

One way to find a place and with industry people to invest is observe carefully where the major oil companies and large independents are drilling, and are successful and piggy back off their success by associated with a an oil company that knows who to deal with in an area like the Bakken Shale in North Dakota. This is a 200,000 square mile area where the dry hole rate has been 9 in over 6,617 commercially successful wells or as announced by professionals in the industry at the Bakken Investors Conference on April 2-4th of 2012.

Operators use money resources based on their personal salary, or expenses or allocated working interestand can legally take expenses from production to deal with the problems, and expenses detailed in this report. When oil & gas production is used to pay fines, clean-up costs, development cost overruns, or cash calls by associated industry persons, most importantly & eventually; unless the oil & gas production is sufficient to pay expenses, and still provide a return of investment that investors can be comfortable with, the Operator or sponsor, issuer and/or promoter is thrown to
the wolves, or is now relegated to the dog house. He is then blamed for everything to include incompetence, fraud, self-dealing, co-mingling of funds, or any number of nasty comments by persons with an axe to grind, or career to ruthlessly damage, or reputation to destroy without facts, or merit, and be able to do so anonymouslywonderful, aint it great? Welcome to the world of private business in this country today!

Writer: Dennis W. Stutes

what is a ringleader?

I'm a manager of a conforming, filed, and in good standing companies dedicated to investing money in oil & gas fields, wells, leasehold interests, and all with the goal of making money for my investor clients. I never make guarantees of performance, or making money, and never have in 30 years. There is no guarantee of success, getting money returned, and it is never implied, or made in any of my memorandums used to fund oil programs.

Here are just some of the reasons for failures of oil deals. Dry holes, mechanical problems incurred during drilling or completion operations, equipment failures of drill pipe, sucker rods, tubing, casing, downhole pump assemblies, lost circulation, breakage of any equipment used down hole, weather problems creating failures in the field, poor sub-contractors, bad or defective equipment requiring replacment of pumps at the company's expense, workers not showing-up, frivilous lawsuits for any number of bogus reasons, employee accidents, death, and the resulting destruction of equipment, such as tank farms, flow lines, electrical pumps, cable, and gun barrels, and water transfer equipment and transfer, and flow pumps of all kinds. There are many more reasons deals fair, are delayed or don't pay what is expected not to mention not finding enough oil to justify keeping the leases going.

First, Oil investments are risky...everyone should know this by now.

Second, I always, and without fail advise my investors to read the memorandums used to acquire funding from private investors.

Third, Few businesses require the degree of disclosure, and profits made by a Sponsor, Issuer, Promoter, or Operator of oil & gas assets.

Fourth, if an investor doesn't undertand the risks, isn't qualified, or a sophisticated investor and accredited investor he should never invest in oil & gas unless he has an 'investor representative' as defined by current securities laws, or not make investments exceeding 10% of his or her net worth.

Fifth, no investor should rely on verbal comments or projections of performance of oil wells, or a program without first checking to make sure the written disclosures, and projections are included in the four corners of the private placement memorandum he or she receives from a company offering securities.

Six, be advised government review of memorandums is regularly performed, and complaints handled by offices throughout the US. This doesn't mean investors are being scammed, or will lose their money in a particular investment. If investors have made investments in programs making money, paying money, and the amount is less than expected, this isn't a reason to question the company's investments, the value, legitimacy or legality of a particular investments offered by the company. Separate PPM's are often used for unique and specialized oil deals such as production vs. developmental v.s exploratory drilling, etc.

Seven, the best, and chief reason private investors should invest in oil & gas drilling programs is for the generous tax advantages which can allow the investor to write the majority of his investment off in the first year, and the remainder in a few years after the investment.



Dennis W. Stutes

Who is this person, as I don't recognize the anonymous poster, or the amount of money he says he invested since the maximum raised so far for North Dakota leashold fractional interests is less than the amount this ficticious poster is lying about. I always clearly show and detail in my memorandums where money is being spent, or will be spent if a new drilling program is being formed. The Hawaii action came about as the result of a strange and vindictive d**k Quinn who was a Hawaii attorney who visited the offices of Ward Petroleum in Enid, Oklahoma, and a privately owned oil company that has been in business since 1957. Mr. Quinn was convinced of the quality of the Ward Petroleum deal we were investing-in and told the other Hawaii investors while he and other Hawaii investors traveled to Oklahoma to review the investment offering in 'new wells' not old capped wells. This lying investor boiler room 'non licensed' & low born gutter snipe is not an investor, and is cutting & pasting, or taking information off the Internet and jamming it into a slanderous posting about a deal he knows nothing about, and is not connected to a new deal being offered by my North Dakota company now. The government officials have never worked in the oil industry as Operators, or funding agents, or sponsor issuers. They are low level government officials wanting to make a name for themselves, and justify their pathetic existance. They should get in private business and take risks like investors, Operators, and people who put their own money in deals structured to make a majority of the money if possible for investors. The person posting this nonsense about me can't hold my jock strap, or deal with me at any level resembling an intelligent manner. Show yourself you coward. Quit lying and placing your false information on the Internet.



1) Oil investments per any private placement memorandum written by any of my securities attornies since 1983 clearly state in great detail just how risky investing in oil drilling, developmental drilling, and production programs are and can be.

2) I have been 'very successful' at times, somewhat successful at other times, and unsuccessful in oil drilling and investment programs since 1983.

 A) When I'm unsuccessful, my investors are upset or unhappy, and I understand it.

3) I have paid out millions of dollars of oil & natural gas production revenue from several oil & gas fields in Kay County, Oklahoma, and in other Oklahoma, and Illinois oil & gas fields where new technologies worked well such as with the use of Reda, or Jet pumps which are submersible downhole pumps used to remove oil & water from zones having higher than is most desirable relative to percentages or amounts of formation water. Horizontal drilling is working well in zones such as the Mississippi Chat, Caney & Jefferson Shale, the Cromwell, Bakken Shale, Eagleford Shale, and other shales throughout the US.

4) I have personnally invested hundreds of thousands of my own money in oil investment programs and to hire attorneys to defend my companies against less than honorable competitiors, sub-contractors, vendors, and continue to fight bogus, and padded invoices submitted for shoddy, or poor work and defective parts, and equipment over the years.

5) I have reported in tens of thousands of emails the status of my oil field operations, and updated investors to include providing Engineering Reports by Chemical, and Petroleum Engineers evaluating my properties, Geophysicists, Geological reports, electric logs, mud logs, coring reports, and other technical information as available, as well as; Joint Interest Billings (JIB's), Production Revenue Reports, Authorizations for Fixed Expenditures (A.F.E.'s), and either 1099's or K-1 tax reports so investors can write-off their investments, which is what industry people do in our business.

6) I may be many things, even incompetent, overly aggressive, or have sometimes picked the wrong people to be associated with in the oil patch...and may not know every rule or law the state government officials can interpret when they issue Cease & desists but I'm not guilty of lying, and making something up that is patently false and designed to mislead investors, or anyone with whom I've done business in 30 years. Albert Einstein once said; "The hardest thing in the world to understand is the income tax." 

Well I often feel this way about the manner in which government officials conduct their oversight function particulary when they lie, work under alias, don't invest, or put their butts on the line in business...and only look for the mistakes, and not the successes of people trying to make a business work in the face of almost impossible odds these days. Why would anyone want to start or sustain their own business when most are living off the government tit, or living on food stamps, and receiving three years of unemployment checks, and other freebie benefits the government hands-out.

7) I'll compare my ethics, good character, honor, work history, education, and military training & experience, all of my credentials, including passing the Series 7, 6, 163, and SB 22 broker licenses, and my nearly now 30 years of oil knowledge, and Operator's experience with any of you bogus lying copy & paste posting scum out there. Dennis

Someone or some group is obviously working together to post several false reports about me with intent to discredit and mislead investors and the public about my investments, and my companies engaged in oil & gas investing in the US. What's interesting is they always get several key facts wrong, or distort, and confuse the reader with a blatently incorrect assessement of official records. In most cases, they just infer something they know nothing about. This ought to be a dead giveaway, that it is a cooperative effort to damage me and my reputation. If they give me their name, and contact informaton, assuming it's not false, I will take steps to sue for defamation of character, slander, and libel, and seek damages in court.

I suppose we should all believe the papers and reporters, and the government always gets a story right, and have no axe to grind, or editor, or boss to please, right? The Hawaii papers got it all wrong, and so did the regulators in Hawaii. I sent my securities attorney to Hawaii, and was told there was no statutue of limitations in Hawaii, even though the case against me was dismissed in Oklahoma. I paid $30,000 to the State of Hawaii to settle the case rather than spend any more of my money, or my clients to fight a bogus claim. Any qualified investors who wants to contact me will be provided  a copy of the dismissal by the court of jurishdiction in Oklahoma.

We invited investors from Hawaii to visit the company, and their self appointed attorney/investor Mr. Richard (d**k) Quinn, now living in Sisters, Oregon. We introduced our Hawaii investors to Ward Petroleum to hear their presentation about the 'new wells' being drilled with our business partner Ward Petroleum located in Enid, Oklahoma. Ward  was drilling new wells to the 'Granite Wash', and 'Morrow Basin' on the Exxon Mobile acreage where we both invested-in because the oil play made sense; and most importantly, because Ward Petroleum, which is an industry player, and successful oil company has been around since 1957. Investors were happy to fund the drilling of a 'direct offset' to the 'Gloria' well that had come-in at several millions cubic feet of gas per day, and several hundred barrels of oil per day. Unfortunately, Ward's direct offset, and a well I invested about a million came-in at less than a million cubic feet of gas per day, and about 50 bopd. For an expensive 10,000' vertical well costing a couple of million in about 2000', this was not a very good outcome. This however, is the reality of the oil business. You can drill right next to a very successful new well in a great field, and not achieve the results you expect or get the result of the first well drilled. We also invested with Grand Energy in Dallas, Texas. This company was drilling new wells as well. Some of the smaller investors in Hawaii decided with d**k Quinn, who was offered his money back, to sue, and the Oklahoma court with all of the facts of the case dismissed it. Interestingly, the biggest investors Michael Vavrinec, Roger Crandlemire, and George Crandlemire with over two million invested did not. Ask yourself why? Later, the Hawaii group requested I step down as manager...and with a threat of a lawsuit, I did. This group then contacted Michael Glick, CPA, and my CPA to handle the oil revenue distributions while they tried to deeply discount the amount of my other investor's investments to get a larger pay-out from the producing oil & gas wells than the non-Hawaii clients. Now readers, why would this Hawaii group do this?

Qualfiied and Accredited Investors can contact me at anytime for a more detailed account of the affairs involving the Hawaii Investors, and the Hawaii regulators, or the Honolulu newspaper printing the erroneous accounts of the investment details.

Bottomline, the poster of the claim against me has no credibility, and knows nothing of the facts of the orignal Oklahoma, or the Hawaii Case.  Dennis W. Stutes