Oil and Gas Private Placement Losses: Investigation of Reef Oil and Gas Companies

shutterstock_140321293Reef Oil and Gas Companies located in Richardson, Texas, is a sponsor of oil and gas private placements and investments.   The investment attorneys at Gana Weinstein LLP continue to report on investor losses in oil and gas related investments, like Reef Oil and Gas.

Investors often do not appreciate the risks when investing in oil and gas private placements. Even before the collapse of oil prices it was rare for investors to make money on oil deals. According to Reuters, of 34 deals Reef Oil and Gas has issued since 1996, only 12 have paid out more cash to investors than they initially contributed. Reuters also found that Reef sold an additional 31 smaller deals between 1996 and 2010 taking $146 million from investors and only paying out just $55 million.

If investments in oil and gas private placements rarely succeed during oil booms, then they will certainly fail under current market conditions. According to Bloomberg, many oil companies are in trouble as U.S. high-yield debt issued to junk-rated energy companies grew four-fold to $208 billion. Most of these companies are now struggling to stay afloat with oil prices at $45. Many of these companies relied upon high energy prices in order to sustain their operations. As reported by the Wall Street Journal the drop in oil and energy prices and the industry downturn has made it difficult for many companies to refinance their debts.

Before recommending investments in oil and gas and commodities related investments, brokers and advisors must ensure that the investment is appropriate for the investor and conduct due diligence on the company in order to understand the risks and prospects of the company. Oil and gas and commodities related investments have been recommended by brokers under the assumption that commodities prices would continue to go up. However, brokers who sell oil and gas and commodities products are obligated to understand the risks of these investments and convey them to clients.

Reef Oil and Gas has made the following recent offerings:


Reef 2015 Oil & Gas Opportunity Fund

Reef 2015 Income Fund

Reef Bakken Bear Cat Drilling Fund

Reef 2012-A Private Drilling Fund

Reef 2011 Private Drilling Fund

Reef 2010 Drilling Fund

Reef 2009 Drilling Fund

Reef 2007-2009 Drilling Program

Reef Oil & Gas Drilling & Income Fund

Reef Oil & Gas Income & Development Fund III

Reef Oil & Gas Income & Development Fund IV

Our firm is investigating potential securities claims against brokerage firms over sales practices related to the recommendations of oil & gas and commodities products such as exchange traded notes (ETNs), structured notes, private placements, master limited partnerships (MLPs), leveraged ETFs, mutual funds, and individual stocks. Investors who have suffered losses may be able recover their losses through securities arbitration. Our consultations are free of charge and the firm is only compensated if you recover.

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