Articles Tagged with Energy 11

shutterstock_175298066-300x225The law offices of Gana LLP recently filed a complaint before The Financial Industry Regulatory Authority (FINRA) on behalf of a investor against brokerage firm David Lerner Associates, Inc. (David Lerner) involving the firm’s financial advisor, Lawrence Merl (Merl) and his recommendation to invest virtually all of the widow Claimant’s savings in an oil & gas private placement – Energy 11, L.P (Energy 11).  The Claimant alleged that David Lerner failed to supervise Mr. Merl’s unsuitable recommendation and failed to conduct due diligence on the investment in Energy 11.

Energy 11 has sustained massive losses that appear to have been hidden from investors due to the fact that the sponsor of Energy 11 gets to state its own value to investors.  Recently, investors in Energy 11 received value information indicating an approximate 65% loss on the investment.  It is possible that the loss if far greater than even the drastic loss already being voluntarily reported by the fund.  Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation.

Energy 11, L.P. is a non-traded oil and gas investment.  The partnership was formed in 2013 to acquire and develop oil and natural gas properties located onshore in the United States.  Energy 11 has raised over $350 million and invested the proceeds in non-operated working interests in approximately 221 existing producing wells and approximately 247 future development locations in the Sanish field located in Mountrail County, North Dakota. Whiting Petroleum Corporation (NYSE:WLL), a publicly traded oil and gas company, operates the Partnership’s well interests in the Sanish field.

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shutterstock_157018310-300x200The investment attorneys at Gana Weinstein LLP are investigating various potentially unsuitable sales of oil and gas private placements.  These investments include those being underwritten and offered by David Lerner Associates, Inc. (David Lerner) – Energy 11 and Energy Resources 12.

Energy 11 was formed to enable investors to invest in oil and gas properties located onshore in the United States. The funds’ stated primary objectives are to acquire producing and non-producing oil and gas properties with development potential, and to enhance the value of those properties through drilling and other development activities.  The fund plans to after five to seven years to engage in a liquidity transaction in which they will sell properties and distribute the net sales proceeds to investors, merge with another entity or list common units on a national securities exchange.

Investors often do not understand the substantial risks of oil and gas private placements.  As reported in Reuters, when offerings by Atlas Energy LP, another issuer of oil and gas private placements were analyzed, investors only get to see 65-70% of their capital actually put to work on oil and gas projects.  Further, the returns on these projects had more in common with running profitable casinos than investments. Reuters found that slightly more than half of 43 private placements Atlas issued over the past three decades investors lost money or just broke even. While investors lost in more than half of the deals in 29 or 67% of those deals, Atlas actually out-performed their own investors.

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