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1. Who can invest?
Only limited companies may participate in individual projects.
2. What is the minimum investment required?
The minimum initial investment depends upon the project but will usually be at least $10,000. Depending upon the project, ongoing additional investments may be required.
3. How often are payments made to the investors?
Each project has a statement of income and expense, usually issued after the end of each month in which activity occurs. If revenues exceed expenses, the surplus will be distributed to the investment trust partners, less the LMP fee. If expenses exceed revenues a cash call will be issued including the LMP fee. If the property is sold, the funds will be distributed when received. No fees apply to the sale of properties.
4. What is the liability?
Investment trust partners are direct investors in the drilling and operation of oil and gas properties. They assume all the liabilities inherent with oil and gas drilling and production. The project operators usually carry insurance for drilling operations on behalf of their partners and insurance for operations. Individual investor companies may wish to carry their own insurance.
5. What are the liquidity options?
There is no public market for the sale of the investor interest in any property. The investor trust partner is free to sell his interest to any other company subject to the terms of the agreement which include a first right of refusal clause to the benefit of the other LMP investor trust partners. In addition, companies may approach LMP to purchase interest in different properties.
6. What is the promote fee?
LMP charges a fee of ten percent added to any cash call, or deducted from any revenue payment. The ten percent fee is also deducted from the initial investment. No fee is charged on sale of an interest (all or partial). GST is included in the ten percent fee.
7. Who are the operators of the properties? What is their track record?
The operators of the properties may be different companies. When a project is offered, the name of the operating company will be identified. Potential investors are encouraged to investigate each operator's track record prior to investing.
8. What is a realistic assessment of how much an investor will make on an investment assuming normal industry risk?
There are no guarantees in oil and gas exploration and development. Determining the potential rate of return is very difficult. Oil and gas projects can be very profitable but can also be unsuccessful. Various risks exist in drilling, completions, in production, facilities and commodity prices. Please see Disclaimer page for more details.
Given all of these risks, the oil and gas industry normally exceeds the rate of return one can expect from other investments such as GICs, Mutual Funds, Real Estate REITs, Mortgage Funds, or Savings Bonds. The investor should consider that an individual oil and gas property may be very successful or a complete loss. Averaging the risk over many projects may reduce the risk.
9. What can go wrong?
Many of the risks were identified in question #8. In addition there can be:
- Permitting problems
- Land issues (including First Nations)
- Environmental issues
- Changes in Regulations
- Changes in royalties and taxes.
Only limited companies may participate in individual projects.
2. What is the minimum investment required?
The minimum initial investment depends upon the project but will usually be at least $10,000. Depending upon the project, ongoing additional investments may be required.
3. How often are payments made to the investors?
Each project has a statement of income and expense, usually issued after the end of each month in which activity occurs. If revenues exceed expenses, the surplus will be distributed to the investment trust partners, less the LMP fee. If expenses exceed revenues a cash call will be issued including the LMP fee. If the property is sold, the funds will be distributed when received. No fees apply to the sale of properties.
4. What is the liability?
Investment trust partners are direct investors in the drilling and operation of oil and gas properties. They assume all the liabilities inherent with oil and gas drilling and production. The project operators usually carry insurance for drilling operations on behalf of their partners and insurance for operations. Individual investor companies may wish to carry their own insurance.
5. What are the liquidity options?
There is no public market for the sale of the investor interest in any property. The investor trust partner is free to sell his interest to any other company subject to the terms of the agreement which include a first right of refusal clause to the benefit of the other LMP investor trust partners. In addition, companies may approach LMP to purchase interest in different properties.
6. What is the promote fee?
LMP charges a fee of ten percent added to any cash call, or deducted from any revenue payment. The ten percent fee is also deducted from the initial investment. No fee is charged on sale of an interest (all or partial). GST is included in the ten percent fee.
7. Who are the operators of the properties? What is their track record?
The operators of the properties may be different companies. When a project is offered, the name of the operating company will be identified. Potential investors are encouraged to investigate each operator's track record prior to investing.
8. What is a realistic assessment of how much an investor will make on an investment assuming normal industry risk?
There are no guarantees in oil and gas exploration and development. Determining the potential rate of return is very difficult. Oil and gas projects can be very profitable but can also be unsuccessful. Various risks exist in drilling, completions, in production, facilities and commodity prices. Please see Disclaimer page for more details.
Given all of these risks, the oil and gas industry normally exceeds the rate of return one can expect from other investments such as GICs, Mutual Funds, Real Estate REITs, Mortgage Funds, or Savings Bonds. The investor should consider that an individual oil and gas property may be very successful or a complete loss. Averaging the risk over many projects may reduce the risk.
9. What can go wrong?
Many of the risks were identified in question #8. In addition there can be:
- Permitting problems
- Land issues (including First Nations)
- Environmental issues
- Changes in Regulations
- Changes in royalties and taxes.