Secure Group, Inc. locates and invests in oil and natural gas producing properties, primarily in Texas, USA. Revenues are derived from sale of the production after the various wells are  drilled and completed. The challenges are to locate the oil and gas reservoirs located in geological formations underground.  Secure Group, Inc. relies on its industry partners to use the latest science and technology to explore and produce (E & P) successfully.

Investing in Oil and Gas Properties (Fields)

Secure Group, Inc. acquires positions, known as “Participation” or “Working Interest”, in Mineral Right Leases, known as “Fields”, and its outlays and revenues are made and received according to the percentage interest held.  When an Oil and/or Natural Gas Well is producing there are costs and operational taxes which are paid out prior to net revenue being received.

Every Well and every  Lease may have differing terms but it is fairly standard that ongoing  lease “royalty” (percentage rent) costs are between 25-30% percent and operations and ad valorem taxes are between 5-10% of gross revenues. This does not include income taxes of the “Participant” or “Working Interest Holder”.  There can also be a onetime  up-front cost to acquire leases which is usually a per acre figure. For example, if a Field is 640 acres and it has a lease cost of $3,000 per acre, the Lease would cost $1,920,000  ($3,000 X 640=$1,920,000) to acquire.

Security of Investment

Working Interest or Participation in Mineral Rights Leases is recorded in the County Court House in the capital of the County where the Mineral Right Lease is located. The holder of the Working Interest or Participation may sell its interest at anytime which asset price is affected by the market price for oil /natural gas and the size of the reservoir. But until another effective owner is recorded all expenses and revenues are attributed to such Owner of Record. Secure Group, Inc. is such an owner.

Texas, in particular, is a well run regulatory environment to participate in oil and gas E & P because of several factors. There is a lot of industry history in Texas.  The industry and its regulations are mature. The State regulatory body, the Texas Railroad Commission (RRC)  is the entity which permits new wells and monitors production for existing wells. All production must be declared for taxation purposes. What is significant is the RRC also licences any entity wishing to be an “Operator” with insurance requirements and other obligations.  Secure Group Inc. has an operating agreement with its well Operator.