HEI Partners - Research & Analysis

The information below was taken from the U.S. Securities and Exchange Commission Website to educate the public and warn investors of red flags occasionally associated with the Oil and Gas Industry (www.sec.gov/investor/pubs/oilgasscams.htm). Although HEI Partners does not offer or sell securities, we have included this information to do research and analyze the SEC recommendations.   HEI believes that the information below is a strong guideline for any potential Partner to follow when considering participation in any oil and gas investment. HEI’s comments are italicized in orange text.     


Oil and Gas Scams: Common Red Flags and Steps You Can Take to Protect Yourself

Henry . . . was a successful business man, married for 30 years, raised a family and had a good life . . . after his wife’s death, he received an [overnight] package of materials with all kinds of reports, and it was offering an oil and gas investment . . . And it was unsolicited. . .  he ignored it . . . But the next day, a salesman called him and used high-pressure sales tactics . . . to persuade him to invest $40,000.  And here are some examples of what was said to him on the phone:  “These gas wells are guaranteed to produce $6,800 a month in income;” “Some of the most successful investors in the country are interested in these wells;”  “There are only two units left in this project;” “We drilled a well in Texas that had these same early gas readings, and the investors all made millions.” . . . Over a three year-period, Henry was recontacted 12 times and invested, essentially, his life savings in 4 different gas wells, each time thinking that he had to invest or lose his original investment . . . He ultimately lost over $500,000 to this oil and gas scam investing in wells that always seemed promising at first  . . .

Description of an oil and gas scam victim at the SEC’s first-ever Seniors Summit (July 2006)


If you think you’ve found the right oil or gas investment to “strike it rich,” consider this:  it may be a scam.  While some oil and gas investment opportunities are legitimate, many oil and gas ventures are frauds.  Many of these schemes start in so-called “boiler rooms,” where skilled telemarketers use high pressure sales tactics to convince you to hand over your hard-earned money. 

Once they have your money, scam artists pay themselves first, often using funds to pay personal expenses.  In the end, only some of your money may be invested in an actual oil or natural gas well, or none at all.

Red Flag Warnings

If you are considering an oil and gas investment, look for these “red flag” warnings of fraud:

  • Sales Pitches Focused on Highly Publicized News. Scam artists read the headlines, too.  Often, they’ll use a highly publicized news item, like volatile gas prices, to lure potential investors and make their “opportunity” sound more legitimate. 

HEI’s focus is on the development of Oil, Natural Gas, Precious and Base Metals. This focus does not change based on highly publicized news. Our goal is to provide individuals with an opportunity to partner in a resource development and manage the direction of the operations.

  •  “Can’t Miss” Wells.  Every investment carries some degree of risk so you should be skeptical of any oil and gas investment opportunity pitched as completely safe.  Fraudsters often spend a lot of time trying to convince you that extremely high returns are "guaranteed" or "can't miss." Don't believe it. 

HEI will be the first one to tell you that there is no such thing as a “Guaranteed; Can’t Miss” well. Every prospect carries some degree of risk. Some of that risk is negated by the favorable tax deduction that accompanies this type of investment. Some risk is also limited by today’s technology to identify structure and by participating in proven development, but there is NO guarantee for success.

  • Unsolicited Materials. Be especially careful if you receive unsolicited materials about an investment.  Simply ignoring investment-related “junk” faxes, emails, voice mail messages, and regular mail may be your best strategy.  And don’t let a package full of colorful marketing materials impress you, even if it’s sent by certified or overnight mail.  If you’re not going to research an opportunity fully, do yourself a favor and put any unsolicited materials in the recycle bin immediately.  If someone calls to follow up regarding the materials, tell him or her “thanks, but no thanks” and hang up.  [Hanging up is critical because scam artists often use scripted sale pitches to keep you on the phone.]

HEI only associates with accredited individuals who request information on the opportunities that we provide.

  • Limited Opportunities.  Scam artists often try to give you the impression that the “ opportunity” they are promoting is scarce, hoping you will hand over your money hastily before doing any due diligence.  Resist the pressure to invest quickly, and take the time you need to investigate before sending money.  

HEI encourages existing and potential partners to review all information regarding the prospect, HEI as a company, recommendations such as this article and any other piece of information they feel that they need in order to make a sound, informed decision. 

  • High Rates of Return. Compare promised yields with current returns on well-known stock indexes. Any investment opportunity that claims you'll get substantially more could be highly risky. And that means you might lose money.

HEI provides existing and potential partners with a Confidential Information Memorandum for each Joint Venture. The Memorandum includes a full disclosure of the risks associated with the development of Oil, Gas, Precious and Base Metals and also clearly states that the entire investment could be lost as a result of an unsuccessful prospect.

  • Tips or Secrets.  A promoter may discourage you from talking about the opportunity with someone you trust, like a loved one, attorney or financial professional.  If that happens, stop listening, and leave or hang up.  Then, be sure to contact us. 

As stated above, HEI encourages existing and potential partners to review all information regarding the prospect, HEI as a company, recommendations such as this article and any other piece of information they feel that they need in order to make a sound, informed decision. This includes speaking to references, technical experts or whomever you feel is necessary to make an informed decision.


Steps You Can Take to Protect Yourself

Here are some steps you can take to avoid being scammed: 

  • Ask questions and check out the answers. Fraudsters rely on the sad truth that many people simply don't bother to investigate before they invest. It's not enough to ask a promoter for more information or for references - fraudsters have no incentive to set you straight. Savvy investors take the time to do their own independent research.

Again, HEI encourages potential and existing partners to ask any question that will help them make a sound; informed decision.

  • Contact state oil and gas regulatory agencies.  You may be able to verify information provided in offering materials by contacting the oil and gas regulatory agency in which the wells are allegedly being drilled.  For example, these agencies generally have information about a company’s drilling history that could confirm claims of prior success. 

HEI will always provide information to verify the existence of the actual well, including but not limited to the Well API Number, Latitude and Longitude Coordinates and contact information for the state regulatory agency. Existing partners are given a secured login to our website where we post daily drilling reports, updates and pertinent partnership information. Our goal is to keep you as updated as possible on the developments of each project.

Investor Tidbit:

You might be surprised to learn that the Railroad Commission of Texas (www.rrc.state.tx.us) oversees the Texas oil and gas industry.  Unfortunately, state oil and gas regulatory agencies don’t have uniform names. If you’re having trouble finding the agency that regulates oil and gas in a particular state, enter the State’s name - followed by “oil and gas” - into your favorite Internet search engine. The appropriate agency should be listed near the top of your search results. If you are still having trouble, call us at (800) 732-0330.

  • Research the company before you invest. You can contact the secretary of state (www.nass.org/sos/sos.html) where the company is incorporated to find out whether the company is a corporation in good standing.  You also will want to understand the company's business and its products or services before investing.  Before buying any stock, check out the company's financial statements on the SEC's website, or contact your state securities regulator (www.nasaa.org/QuickLinks/ContactYourRegulator.cfm). All but the smallest public companies have to file financial statements with us. If the company doesn't file with us, you'll have to do a great deal of work on your own to make sure the company is legitimate and the investment appropriate for you. That's because the lack of reliable, readily available information about company finances can open the door to fraud.  Remember that unsolicited materials should never be used as the sole basis for an investment decision.

HEI was incorporated in the State of Texas in 1998 and is in good standing. We would be happy to provide any information necessary to make an informed decision. 


  • Know the salesperson. Spend some time checking out the person touting the investment before you invest - even if you already know the person socially. Always find out whether the securities salespeople who contact you are licensed to sell securities in your state and whether they or their firms have had run-ins with regulators or other investors. You can check out the disciplinary history of brokers (www.nasd.com/web/idcplg?IdcService=SS_GET_PAGE&nodeId=469) and advisers (www.adviserinfo.sec.gov) quickly - and for free - using the SEC's and NASD's online databases. Your state securities regulator (www.nasaa.org/QuickLinks/ContactYourRegulator.cfm) may have additional information.

HEI does not offer or sell securities, therefore our staff members are not required to register as licensed securities brokers. Our employees are honest, have knowledge of the industry, excellent communication skills and a strong work ethic. Our employees do the right thing, because we as a company feel it is our duty to do the right thing. 


If you encounter a problem with an oil and gas investment, you can send us your complaint using our online complaint form at www.sec.gov/complaint.shtml.  You can also reach us by regular mail at:

Securities and Exchange Commission
Office of Investor Education and Advocacy
100 F Street, N.E.
Washington, D.C. 20549-0213




DISCLAIMER:   The information provided on this website does not constitute an offer to sell or the solicitation of an offer to buy any security, any interest in HEI, or any affiliate thereof. Prospective investors in or partners of HEI should not rely upon or construe the contents of this website as legal, tax or financial advice. A portion of the information provided by HEI personnel on this forum may constitute forward-looking statements, which may be the opinion of such personnel and not necessarily the opinion of HEI or any particular officer, employee or affiliate thereof. Such information is merely an estimate of future performance or results, and is not intended to be, and in fact is not, any estimate, promise or guarantee of future performance or results. Actual performance or results may not meet such expectations and may differ materially. In evaluating these forward-looking statements, you should consider various factors that may cause actual performance or results to differ materially from those expressed in any forward-looking statements contained herein. HEI cannot guarantee future results, levels of activity, performance, achievements, or events. Moreover, HEI does not assume and hereby disclaims any responsibility for the accuracy and completeness of such forward-looking statements in the future. HEI does not plan to update any of the forward-looking statements made herein to conform such statements to actual performance or results.