Oil and Gas Limited Partnerships and Oil and Gas Offering Fraud, Misrepresentation and Mismanagement – South Florida, including Fort Lauderdale, Pompano Beach, Deerfiled Beach, Boca Raton, Boynton Beach, Delray Beach, Lake Worth and West Palm Beach, Litigation and Arbitration Attorney
An oil and gas limited partnership is legally set up using the same format as any type of limited partnership. It is created by filing articles of limited partnership or its equivalent in the state of its domicile. For example, Florida Statute, Chapter 620 governs the legal requirements that must be followed in the formation, operation and dissolution of the limited partnership, whether it is engaged in the oil and gas business or not. This post is limited to a general discussion of an oil and gas limited partnership.
An oil and gas limited partnership is made up of one or more general partners and one or more limited partners. Generally, it is structured to find, extract, and market commercial quantities of oil and natural gas. These types of investments are usually offered by prospectus, in the case of a public offering, and by a private offering memorandum, in the case of a private offering of securities. In either offering document, it is important to consider, among other things, who is making the offering, which brings to the forefront such items as experience, prior success and financial stability. The next important section of the document relates to the “risk” factor section of the document. Usually, in bold type there is a phrase such as “this offering involves a high degree of risk and should be considered only by those investors who can stand to lose their entire investment.”