Crude energy-guide-to-oil-gas-investing

DIRECT INVESTING IN OIL WELLS
INVEST DIRECTLY IN U.S. OIL & GAS WELLS
& OWN A PIECE OF THE AMERICAN OIL BOOM

Crude Energy: Leading Direct Oil Investments
Once it was Spindletop. Now it is shale, and America is
gushing once again. There has never been a more oppor-
tune time to invest in US oil. Through direct participation,
sophisticated investors can diversify and reinforce their
portfolios with a stable commodity that not only enjoys
steady demand, but is expected to continue to boom in
years to come.
The amount of oil that we are getting out
of shale formations with new technology,
such as fracking, represents only a small
percentage of what is actually in place in
that rock. The American oil boom is going to
last for a long time to come, and the possi-
bility of ‘Peak Oil’ has now faded into the
realm of myths.
– Parker Hallam, President, Crude Energy
At Crude Energy, our primary goal is to increase the value
of acquired oil and gas properties by employing the latest
advancements in technology to exploration and extraction
to put direct investors in oil and gas wells on the fast track
to attractive, long-term revenue streams.
Based in Dallas, Texas - on the frontline of the American oil
boom - Crude Energy offers oil investment opportunities
through direct participation programs that give investors
the opportunity to get in on the ground floor of oil revenues
flowing through wells, participate directly in the cash flow
and enjoy unique tax benefits.
The experts at Crude Energy can help guide you through
the process of direct participation from start to finish,
ensuring your peace of mind and your piece of the shale
revolution, which has catapulted the United States to the
top position in global oil and gas production.
Invest Today: (214) 935-1583 I invest@crude.com I crude.com I 02

Welcome to the US Oil Boom: Your Best Investment Yet
Massive reserves of oil and gas locked deep beneath the
rock surfaces are accessible for the first time in American
history, ushering in a shale revolution on the back of
tremendous advances in drilling and extraction technology.
A combination of new horizontal drilling and hydraulic
fracturing, or “fracking”, has rendered the United States the
world’s biggest oil producer, overtaking Saudi Arabia and
Russia.
Hidden amongst all these astounding figures is another
boom within a boom that is truly American in every sense of
the word: Not only is the US oil and gas sector growing
soaring, but this market is open to private investors who
wish to participate directly. It’s no longer simply a
playground for big-time brokers and investment bankers.
These simultaneous booms are feeding off each other to
create an enormous amount of capital to drill, drill, drill and
earn, earn, earn.
For 2014, daily US production of crude oil and natural gas
liquids has exceeded 11 million barrels. US crude oil
production alone averaged around 8.6 million barrels per
day in August 2014, representing the highest output since
1986. Production is projected to continue to soar right
along with global demand, which is expected to increase
by more than one-third - from 87 million barrels per day in
2010 to 119 million barrels per day by 2040.
The next five years will be the biggest boom ever. Oil and
condensate output is expected to rise to 9.9 million barrels
per day in 2019, reaching 1970 highs.
U.S. natural gas production by source in the Reference case. 1990-2040
U.S. Field Production of Crude Oil
1990
Trillion Cubic Feet
History 2012 Projections
0
10
20
30
40
2000 2010 2020 2030
2008
1500000
1750000
2000000
2250000
2500000
2750000
3000000
2009
U.S. Field Production of Crude Oil (Thousand of Barrels)
2010 2011 2012 2013
2040
Shale Gas
Tight Gas
Lower 48 onshore conventional
Lower 48 offshore
Coalbed Methane
Alaska
Figure MT-44.
Contact us for more info on investing with Crude Energy: (214) 935-1583 | invest@crude.com

The Technology: What Makes it All Possible
While the US oil boom has been fed by an increase in
overall oil and gas wells, the main trigger has been new
technology that has made it possible to extract oil from
places that were previously inaccessible, particularly out of
shale rock.
Advances in technology now allow us to reach greater
depths, faster and more efficiently, and to produce more
from each well. Today, the most productive wells are
producing up to four times as much as their counterparts
were a decade ago, according to analysis Energy Informa-
tion Administration (EIA) data.
most efficient method of extraction to get you on the road
to revenues.
Conventional or Vertical Drilling: This is the most tradi-
tional—and generally the cheapest—method of drilling. It
involves drilling wells vertically from the surface straight
down to the pay zone.
Horizontal Drilling: This is newer technology that enables
drillers to make sharp turns in the drilling path and run it
horizontally along a thin pay zone. This type of drilling
also enables multiple well bores along the drilling path.
So while horizontal drilling is a more costly undertak-
ing, it also gives the driller more well bores from which to
extract.
Slant Drilling: This method of drilling involves drilling at a
30° to 45° angle in cases where it is necessary to
minimize surface environmental disturbances due to the
proximity of a lake, for instance. Slant drilling allows
drillers to reach under the bed of a lake by drilling from
onshore and angling the path.
Directional Drilling: This is the latest advancement in
drilling, which allows for a change in direction and depth
multiple times within a single well bore, much the same
way a plant grows roots.
Once a well is drilled, hydraulic fracturing enters the fray in
some of the tougher geological venues. Hydraulic fractur-
ing is part of the production process, not the drilling
process. It employs the use of fluids and other materials to
create small fractures in a formation with the goal of stimu-
lating production from an oil or gas well. The fracturing
creates a path that can exponentially increase the rate of
flow of oil and gas through the well.
The advent of horizontal drilling combined with hydraulic
fracturing has been the core of the American oil boom. And
while these techniques make drilling more expensive than it
used to be when explorers simply drilled a hole in the
ground and oil gushed out, they have also unlocked forbid-
den reserves and boosted production exponentially.
As a potential investor, it is important to understand how
wells are drilled, the various types of drilling techniques
employed, and how location and geology determine the

The Shale Formations: Where It All Comes Together
within its conﬁnes, including the Cline Shale, Avalon,
Wolfcamp, Bone Spring Field, Spraberry Field, and the
Yeso Oil Play.
The Anadarko-Woodford Play: This is a crude and liquids
play in West-Central Oklahoma, running through the
Anadarko Basin. Depths range from around 11,500 feet
to 14,500 feet
Granite Wash: This is a multiple-play shale in the
Texas-Oklahoma Panhandle, with stacked formations
reaching 15,000 feet.
The Niobrara: This shale play is located in the Rocky
Mountains, overlapping Colorado, Wyoming, Kansas
and Nebraska. Wells run slightly over 6,000 feet.
Accounting for the bulk of US shale oil production are the
massive oilﬁelds in the Bakken, Eagle Ford and Permian
Basin.
The Bakken: This shale play is located in Eastern Mon-
tana and Western North Dakota, reaching into parts of
Saskatchewan and Manitoba, and represents one of the
biggest US oil developments in four decades. Wells here
run around 10,000 feet deep.
Eagle Ford: This shale play runs 400 miles from South-
west Texas to East Texas and is a fracking haven that has
as much gas as it does oil.
The Permian: The Permian Basin is a massive Texas-fo-
cused shale play that includes a host of other plays

What is Direct Investing in Oil and Gas?
& gas production, Texas remains the biggest producer of oil
in the United States, with some 11.5 billion barrels of crude
oil deposits—or one-third of all known US reserves. Today,
Texas oil accounts for nearly 36% of all US oil production.
The Bakken, Eagle Ford and the Permian Basin are each
producing more than 1 million barrels of oil per day, with the
Permian leading the pack at 1.6 million barrels a day.
While the Bakken has allowed North Dakota to quadruple oil
natural gas wells, with the investor owning a portion of a well
and receiving a share of any income generated by that well.
What sets direct investments apart from traditional stocks
and bonds is that private individuals can invest directly by
purchasing fractional ownership in tangible assets such as
an oil or gas well and then reap the potentially huge rewards
of well production through a steady, long-term income
stream, while at the same time beneﬁting from special tax
deductions.
Most investment portfolios are comprised of stocks, bonds,
cash, mutual funds, or ETFs. Before 1930, fewer than 10% of
Americans were shareholders of public companies. Today,
54% hold shares in public companies. This is now changing,
too, with the new trends favoring expansion of investing in
private equity and hedge funds on one hand, and in tangible
assets through direct investing on the other hand.
Direct investing in oil and gas wells allows private investors to
directly participate in the drilling and completion of oil and
0
2007 2008
Barrels/Day
Permian Basin
Eagle Ford
Bakken
2009 2010 2011 2012
Daily Oil Production: Permian Basin, Eagle Ford and Bakken
January 2007 to August 2014 (est.)
2013 2014
Source: Energy Information Administration
2015
400,000
800,000
1 Million
1,200,000
1,600,000

How You Invest
investing in. Oil and gas companies typically have multiple
prospects, but do not independently have enough working
capital to drill each and every one on their own.
To facilitate the drilling of multiple wells, companies are
willing to share a portion of the profit in exchange for upfront
funding. This allows the company to develop multiple pros-
pects at one time and increase the chances of high-level
production.
A private, accredited investor can invest directly in oil & gas
drilling operations, which means that the investor is directly
liable for a portion of the ongoing costs associated with the
exploration, drilling and production process. Through a
direct working interest, the investor is also entitled to a
portion of the profits when oil starts flowing. The difference
between direct investing, or purchasing a working interest in
a well, and investing in royalties is that with royalties an inves-
tor pays out only an initial investment and is not liable for the
costs of exploration, drilling and production. As such, a
royalty investor also has lower potential for large profits.*
It is important to fully understand exactly what you will be
Direct Investment Facts
Direct Investments are investments in tangible, hard assets, and are not the same as purchasing shares in public companies
Direct Investments offer income over a long period of time, should the venture be successful
Direct Investments offer investors immediate and substantial tax deductions, regardless of whether wells come up dry
Direct Investments offer both increased risk exposure and increased potential for return
Direct Investments require certain income and net worth thresholds for investors, which may vary by state
Direct Investments may have substantial upfront fees that must be paid at the time of purchase
Direct Investments are not sold on any formal secondary market and are therefore not considered liquid investments
Accredited investors are set to lead the
revolution in the market for tangible oil
and gas assets.
Through a direct working interest, the
investor is also entitled to a portion of the
profits when oil starts flowing.
*Disclaimer: Severance taxes and the costs of goods sold are “production costs” that royalty owners pay.

Accredited Investors Only
After oil is discovered and the well is producing, net reve-
nue checks are sent out monthly. The amount of the reve-
nue is based on the amount invested and the amount of oil
produced. The amount may vary as production varies, and
as crude oil prices fluctuate. Payments continue for as
long as the well is producing, or until you sell your share of
the investment.
Direct investments are considered long-term investments,
and are not for everyone. Only accredited investors may
purchase these tangible assets, and since there is no official
secondary market, assets are not considered liquid.
Regulation D, Rule 501 of the Securities Act of 1933
defines an accredited investor as:
a) individual net worth over $1 million (or joint if married),
excluding value of primary residence; OR
b) individual income over $200,000 in each of the previous
two years ($300,000 if married), and a reasonable expecta-
tion of the same income level in the current year
Businesses and organizations have different restric-
tions. An accredited investor can also be:
a) a charitable organization, corporation, or partnership with
over $5 million in assets, OR
b) a business in which all equity owners are accredited
investors, OR
c) a bank, insurance company, registered investment com-
pany, small business investment company, or business
development company, OR
d) a trust with assets over $5 million, not formed to acquire
the securities offered
When you purchase a direct investment, you are purchasing
a portion of an actual tangible asset, and typically you are
purchasing a portion of the well itself. The proceeds from the
production of this well are your profit, paid out in regular
distributions. The percentage you receive is directly tied to
the percentage of the well you purchased.
Basic Accredited Investor Requirements
(May vary from state to state, country to country)

How Much Can You Earn? When Do You Break Even?
The “break-even” point is the point at which you recoup
your entire investment in the form of revenue from the well.
Performing what is called an “acid test” will tell you what
your break-even point will be in the form of barrels the
project must produce in order to recoup your investment.
In order to complete the acid test, you should know the total
amount of your investment, your net revenue interest that
was offered, gross revenue, and the price of oil per barrel.
Let’s say you were offered a 0.9% net revenue interest
in a project for a $500,000 investment. Divide the am-
ount invested ($500,000) by the net revenue interest
(.009).
$500,000 investment / .009
= $55,555,555 total revenue needed
$55,555,555 is the total amount of revenue the entire well
will need to generate in order for you to break even. Know-
ing the revenue needed and an estimated cost per barrel
will tell you how many barrels a well will need to produce to
generate that much income.
If oil averages a cost per barrel of $45:
$55,555,555 revenue needed / $45 cost per barrel
= 1,234,567 barrels
In this example, in order for you to recoup your entire invest-
ment, the well will need to produce 1,234,567 barrels of oil
over the life of the well. To see if this ﬁgure is a realistic
expectation, you can look at surrounding wells to see if any
of them have had similar yields.
There is no way to predict how much money can be made
from your direct investment in oil and gas, and anyone who
tells you otherwise is trying to sell you something you don’t
want. Both the potential risks and the potential rewards are
high. The type of direct investment also impacts your return,
such as the difference between investing in a “wildcat”
exploratory well and in an already producing well or a devel-
opmental well, which seeks to strike oil in proven areas and
next to wells that are already producing. The bottom line is
that the higher the risk associated with a certain type of
drilling, the higher the potential reward.
The potential income from a well is directly related to the
cash ﬂow from the well’s production. Wells can produce oil
for 20 years, or even up to 50 years under their own pres-
sure, and have the potential to offer a steady income stream.

Oil and gas direct investments offer
bigger tax breaks than any other type of
investment.
What Are The Tax Advantages?
extracted), how much was actually extracted during the tax
year, and how much it cost to extract the resources. In other
words: the proportion of resources extracted is divided by
the total resources to come up with the percentage of
deduction. Depletion allowances can shelter 15% of the
annual production from income tax. Deductions can be
taken as long as the wells are productive.
Depreciation
Although services and materials used in the drilling process
have no salvage value, the actual tangible equipment used
to complete a well is generally salvageable, and as such, are
depreciated over a 7-year period. These tangible comple-
tion expenses can account for between 25% and 40% of
the total well costs. Everything from casings, tanks, pump-
ing units and wellheads and trees (which control the flow of
oil and gas out of wells) are depreciable expenses.
Intangible Completion Costs (ICCs)
ICCs include non-salvageable goods and services. They
average around 15% of the total cost of the well. ICCs are
deductible in the year the expense was incurred, and
include elements such as labor, completion materials, com-
pletion rig time and fluids.
Intangible Drilling Costs (IDCs)
IDCs are expenditures related to drilling. They represent the
majority of the expenses associated with drilling, and
typically comprise 75% to 85% of the total well. IDCs are
100% deductible against taxable income in the first year.
IDC deductions are available in the year the money was
invested, regardless of when the drilling begins. Another big
advantage of IDCs is that they can offset up to 40% of the
Alternative Minimum Tax (AMT) income, should you fall into
that tax payer category. IDCs include fuel, wages, chemi-
cals and services such as hauling.
Oil and gas direct investments offer bigger tax breaks than
any other type of investment. The federal government, in an
effort to encourage investments in oil and well prospecting,
has offset some of the risk by offering substantial tax bene-
fits. High-net-worth individuals can realize substantial bene-
fits and lower their overall tax burden from the tax incentives
that come from directly investing in oil and gas.
Tax advantages also provide partial insulation in the event of
an investment loss. Because of the substantial tax breaks
offered, investors are essentially using pre-tax dollars to
make their investment. If a well turns up dry and there is no
return on the investment, part of what investors are losing
are pretax dollars which would have otherwise been paid to
the government in the form of income tax — sometimes up
to 30%-40% of the total investment.
Because tax benefits are available even when the well does
not produce any oil, further insulation is gained from claim-
ing these benefits in the year the investment was made.
Depletion Allowance
Depletion allowances are additional tax incentives that
encourage investment in oil and gas. Because oil and gas
are finite resources that will eventually be exhausted, deple-
tion allowances are granted for a portion of the producing
well’s gross income. After the well begins producing,
interest owners can shelter a portion of the gross income
that comes from selling the oil or gas. There are two types
of depletion allowances: cost and statutory. Cost depletion
looks at total recoverable reserves (how much can be

Follow the supermajors. If the superma-
jors are drilling in your prospective area,
then the potential for reward is high.
Where to Invest: Finding the Sweet Spots
ator is achieving real results. Follow the supermajor compa-
nies and the large independent operators: If they are drilling
in an area, then there is potential.
Crude Energy focuses on the prime oil-producing regions of
Texas, Oklahoma, Louisiana and North Dakota—all venues
where drilling is coming up with gushers—and drills with the
biggest players on the scene, including Royal Dutch Shell,
Chevron, Devon and Chesapeake.
Location, Geology and Proven Reserves
Is the prospective location in a proven area?
How are other wells in the area faring?
Who else is drilling in the area and what does this tell you?
Choosing where to invest in oil wells requires a fair amount
of due diligence. While the shale revolution ensures us that
there are plenty of venues for private investors to choose
from, it is important to evaluate an oil prospect by looking
at how other wells in the immediate vicinity have fared.
Prospective investors should seek detailed data on nearby
wells explaining the depth to which those wells were drilled
and how much they have subsequently produced.
Prospective investors should also seek seismic data that
portrays the geological characteristics of a prospective
drilling area to determine the likelihood of success. The key
indicators here will be “proved production” and “proved
recoverable reserves”.
You can also consult with the relevant state agency respon-
sible for maintaining records on production, drilling and
development activities to make sure you are about to invest
in something that promises real returns, and that your oper-
Tangible Drilling Costs (TDCs)
TDCs also represent a substantial expense. This category of
expenses includes the actual drilling equipment, such as
wellheads, pump jacks and casings. Unlike IDCs, TDCs are
capitalized and depreciated over a 5-year period. Deduc-
tions are capitalized over ﬁve years.
Lease Operating Expense
Lease operating expenses cover the ongoing costs associ-
ated with operating the well, and are deductible in the year
the expenses are incurred. These deductions do not have
any AMT consequences.
Alternative Minimum Tax (AMT)
The above tax beneﬁts associated with oil exploration and
development used to mean additional taxation through the
AMT. Now, however, individual companies producing 1,000
barrels or less, daily, are not subject to AMT. This means
that the statutory or cost depletion allowances are no longer
considered a preference item and do not trigger the AMT.
Assessing Your First Direct Investment

Follow the Technology to the Next Boom
The recent shift here to horizontal well drilling has rendered
this play the unexpected ground zero of the American oil
boom. Operators in the Permian Basin have been slower
than they have elsewhere to switch from vertical to horizon-
tal well drilling, but today, horizontal is now outpacing the
vertical and investors are lining up to get in the game.
While Eagle Ford and Bakken were viewed as the “bigger
plays” at the start of the US shale boom, due to the fact that
new technology debuted here earlier and more energetical-
ly, the Permian is back and bigger than ever—and the tradi-
tional US oil giant has now been revived. It’s no longer just a
mature play—it’s a major growth area. Of particular interest
to Crude Energy are the Permian Basin’s Wolfcamp, Fussel-
man, Cline, Mississippian and Strawn zones.
This doesn’t mean that vertical drilling is a thing of the past
by any means. While horizontal drilling is changing the future
of the Permian Basin, vertical completions using new tech-
nology such as fracking and co-mingling multiple zones are
turning out top results, and drillers are seeing strong eco-
nomics in these wells. Crude Energy is active throughout
North America, drilling both vertical and horizontal wellbores
and capitalizing on new trends and technology in the industry.
This is what following the technology tells us: Eagle Ford
and Bakken became economical only after being drilled
horizontally, so with the ﬁnal shift to dominate horizontal
drilling in the Permian, the game has only just begun, while
at the same time vertical drilling and the conventional game
is still a winner.
Multi-well pad drilling: Getting More out of Eagle Ford
While the Permian is back on everyone’s radar as a huge
growth prospect, and the Bakken remains a key venue with
Determining where the next big oil boom will be depends
largely on following the technology, from the latest in drilling
advances and the extraction miracle of hydraulic fracturing
to 3D and 4D seismic imaging, which leads us to the sweet
spots faster and with less risk of drilling a dry well.
Crude Energy was founded on the fundamental principles
of applying state-of-the-art petroleum and natural gas
exploration and extraction technology to the development
of onshore oil and natural gas projects. Crude Energy is a
technology-driven company, with cutting edge expertise in
all of these latest advancements, capitalizing on new trends
in the industry. Crude Energy drills both vertical and
horizontal wellbores, and partners in 2D, 3D and 4D seismic
shoots that generate high-grade drilling opportunities.
Full circle to the Permian basin
One of the most exciting stories of the American oil boom
over the past couple of years has been the Permian Basin in
western Texas & southeastern New Mexico, which encom-
passes an area about 260 miles wide and 300 miles long.
This basin was once thought to have reached peak produc-
tion, but its fate that has been changed by new technology.

extraction more efficient.
Pad drilling took off in the Bakken and Eagle Ford in 2010
and currently accounts for around 75% of all wells drilled in
these major venues.
The revolutionary process is also highly visible in the
Barnett shale, where it was first widely implemented in
2006, as well as in the Fayetteville shale formation in
Arkansas.
Fracking, the extraction revolution
Hydraulic fracturing has played a major role in the ongoing
American oil boom, and today some 90% of all oil and gas
wells in the US have used this process to boost production
at one point or another.
Fracking takes place after the well is completed and is
used where geologic formations contain large quantities of
oil or gas but has poor flow rates due to low permeability,
damage, or clogging of the well bore during drilling. This is
particularly significant for shale formations and tight sands.
The fracking process involves the injection of water and
chemicals into the well, while the pressure from the flow of
this fracking fluid creates cracks or fractures to enable a
revolutionary increase in the oil and gas flow rate.
companies bidding up acreage, the technological advances
in the prolific Eagle Ford shale in Texas are an investors’
paradise.
In 2013 alone, the impact of the Eagle Ford shale on south
Texas’ economy alone was more than $87 billion. This inc-
ludes direct economic impact of oil and gas exploration,
and indirect economic activity created from suppliers
building warehouses, workers spending their paychecks,
and much more. The economic impact of Eagle Ford on
this area was $61 billion in 2012, and by 2023 the projec-
tion is $137 billion.
The technological advancements here have been highly
lucrative for investors. Companies in the Eagle Ford are
drilling multiple wells on each pad location leading to more
production with lower costs, and there is a flurry of activity
underway for improving the recovery of oil and gas.
Along with hydraulic fracturing and horizontal drilling, pad
drilling has been a key innovation contributing to the
ongoing American oil boom, and this is highly visible in
Eagle Ford. Where before operators would have to drill a
single well and then disassemble the rig and move it all to
a new location, now they can drill up to 20 wellbores from
a single location, significantly cutting costs and making

The bottom line is that if someone tells
you they’ve struck oil in your well but
don’t have the money to develop it to
production, it is very likely a scam.
Avoiding Investment Pitfalls: Advice for the Sophisticated Investor
possibility of fraud, an operator’s track record, the type of
drilling project and the potential tax benefits.
Private direct investing in the oil and gas sector is an under-
taking that requires very careful navigation of pitfalls,
scams and unscrupulous players. If something sounds too
good to be true, then likely it is. This is a potentially
high-risk, high-reward investment arena and this should be
clear from the start.
Sophisticated investors not only look at the profit potential
of a deal, but examine a number of variables, including the
which generates high-grade drilling opportunities.
Learn more about why seismic is invaluable to the drilling
process, and how this cutting-edge technology works from
Crude Energy.
Hot spots, emerging plays and ‘wildcats’
3spots for a greater chance of payoff, or target emerging
plays or even “wildcat” exploratory wells that may come up
dry or may turn out to be the next big gusher.
Returns are never guaranteed, and there’s always a chance
that a well will come up dry. Even if a producing well is the
target, it is important to understand that the initial years of
production will be the most lucrative, while later years will
see a declining yield. Along with this declining yield comes
diminished returns and high costs to keep things pumping.
While investing in proven areas comes will less risk, more
sophisticated investors often seek to raise the stakes by
investing in a “wildcat” exploratory well in an unproven area.
The risk here is substantial, but the reward is potentially
phenomenal.
The best way to mitigate some of the risk while maximizing
potential reward is to diversify your direct investing portfolio
with a mixture of producing wells, exploratory wells in proven
areas and “wildcat” wells.
Seismic imagery, removing the guesswork
Advances in seismic imaging are helping oil and gas com-
panies achieve exploration results faster and with less
money wasted on drilling dry wells. The advent of advanced
3D and 4D seismic imaging have greatly changed the explo-
ration game by allowing geologists to understand, in detail,
the sub-surface structures of a formation and more accu-
rately predict the presence of hydrocarbons. But it doesn’t
stop there: seismic imaging also plays an important role in
oil and gas development and production management.
While 3D imaging gave us a much more accurate blueprint
of what lies under the surface of tricky formations, 4D
seismic surveying decodes a variable that allows explorers
to see how a reservoir is changing over time.
The seismic imaging takes place after an area has been
established as prospective for oil and gas. The process in-
volves directing intense acoustic energy into the earth and
recording the energy reflected back and collected by geo-
phone listening devices. While 2D seismic shows us results in
two-dimensional vertical cross-sections of the earth’s
subsurface, 3D seismic give us results in a three-dimensional
cube, while 4D measures changes in reservoir fluids over
time and is most valuable for development activities.
Crude Energy specializes in 2D, 3D and 4D seismic imaging,

debt in a worst-case scenario. The risk here is phenome-
nally higher than in a working interest context.
Vulnerability to Regulatory Scrutiny: Although a joint
venture interest is technically not a “security” under the
laws of many states—including Texas—many state security
regulators nonetheless treat JV interests as securities and
expect the appropriate filings to be made. This could lead
to a securities investigation for unsuspecting investors,
while the bad-actor provisions of the Dodd-Frank Act allow
for the total destruction of the private offering exemption if
the issuer receives a final state regulatory order to cease
and desist. As such, a JV offering could leave an investor
vulnerable and defenseless.
Also be wary of:
Salesman who offer you “no risk” deals and claim a
100% success rate;
High-pressure sales tactics; legitimate oil and gas com-
panies understand the risk, welcome due diligence and
are happy to provide details and answer any questions
Blue Skies … All the Way
Finally, make sure the company you’re dealing with is
‘Blue-Skying’ the offer. Blue Sky laws are state laws and
regulations designed to protect investors against securities
fraud. Among other requirements, Blue Sky laws require
sellers to file a specific notice for each of their offerings, to
claim access to the private offering exemption, and to avoid
a formal registration process.
Why Blue Sky is paramount to a successful investment:
It is the bare bones minimum requirement for any private
offering
Compliance is neither complex nor expensive
Compliance demonstrates that the issuer is a responsi-
ble corporate citizen
Beware of scams
There are scams and fraudulent deals around every corner.
Among the more notorious scams are lies about striking oil
in order to lure investors in to provide additional funds to
“cover the costs of development”. If you’ve gotten to this
point then you’ve already invested with a disreputable com-
pany and may not be aware of their intentions. This particu-
lar scam is well thought out and often comes along with a
couple of checks to convince the investor of the deal’s
legitimacy. What they are doing is taking your initial invest-
ment money and sending small chunks of it back to you in
order to convince you to invest more. It’s a fake return on
investment. Always seek documented evidence of drilling
progress at every step. The bottom line is that if someone
tells you they’ve struck oil in your well but don’t have the
money to develop it to production, it is very likely a scam.
It is also advisable to steer clear of joint ventures (JVs) in
direct investing due to the disproportionately high risk. Why?
Liability and Disclosure Issues: Because JVs are general
partnerships, each individual JV interest owner will have
joint and multiple liability exposure. Almost across the
board, these JV agreements are misleading to investors,
intimating that each JV interest holder is only responsible
for his or her “pro-rata” portion of any liability, when in fact
this so-called provision is ineffective when it comes to third
parties—the direct investor. A direct investor in this situation
will find that they can be pursued for the entire amount of

Confirm the operator’s track record
In the oil and gas business, experience means everything.
The ideal investment partner will have over a decade of
experience and a proven track record of successfully—and
routinely—finding oil and gas and churning profits.
Any reputable company should be transparent, and should
willingly share information with potential investors to make
sure it is the right match between investor and the company.
Companies should also be willing to provide a list of existing
investors so you can speak with them to obtain a reference.
In addition to upfront information, reputable companies
should be accessible throughout the project. Investors
should determine how information is disseminated during
the project, and how often those project updates occur.
Verify the paperwork
Another common scam is to actually hit oil and then have
the operators claim it for themselves by a trick of paperwork
that left exact well ownership ambiguous. You get stuck
with a dry well, while the operator earns big revenues off of
a successful well drilled with your money.
It is paramount that as a direct investor in oil and gas, you
have access to and the ability to verify ownership records,
direct assignments and all other records pertaining to the
wells on your leases, which is best done with the local
authorities in the county in question. You should receive a
“recorded assignment” of your fractional interest and direct
ownership in an oil and gas leasehold. County authorities
can then provide you with recorded documents that will
confirm the legitimacy of your investment.
Is Direct Investing For You?
A hedge against rising prices
A hedge against stock and interest rate movements
Low and finite supply of oil & gas, coupled with high
demand on an upward trend
Diversification of overall holdings
Potentially massive payback on drilling
Generous tax benefits
Volatility
Risks tied to drilling operator
Potential for scams and fraudulent deals
Potential for wells to come up dry
Depleting assets
Relative illiquidity
External economics and political incidents could
affect pricing and availability
Pros Cons

Crude Energy: Our Mission
What Our Investors Have to Say
Crude Energy invests millions of dollars every year in research and development of new processes and procedures
and continues to fully utilize the latest technologies in order to reduce dry risk and increase the likelihood of drilling
commercially productive wells.
Our exploration activities are focused on adding profit -generating production to existing core areas and developing
new core areas.
We work for sophisticated investors by:
Acquiring oil and gas properties that give us a majority working interest and operational control;
Maximizing the value of our properties through increasing production and reserves, while controlling costs;
Remaining focused on specific regions where we have a competitive advantage due to expanding infrastructure;
Acquiring properties where we believe additional value can be created through secondary and tertiary recovery operations
and other techniques.
“Congratulations on leading your investors to such a good well. If it weren’t for you I would have lost faith in the operation
and that the investors were being put first and foremost. How many persons have an oil company without investors? Espe-
cially pleased investors, ones who have been treated fairly. Thanks for your diligent effort.”
— Graham P. North Carolina
“I have had nothing but positive experiences with Crude Energy. They have been responsive to my questions and prompt
with payments and documentation matters. If you are interested in this type of investment, this is the group to invest with.”
— Kurt W. Carlisle, PA
“We’ve been working with Crude for a year now and it has given us excellent opportunities to make direct investments in oil
and gas working and royalty interests. Communication has been great with prompt responses whenever we’ve had ques-
tions or needed updates. We are impressed with the level of professionalism shown by everyone at Crude.”
— Jim E. Rockwall, TX
“I have been very satisfied with my investment in BR Jerico. I am close to retirement, and, especially in the current market, it
is a great relief to own an investment that reliably delivers a strong return.”
— Paula M. Houston, TX
“I am happy to have a chance to look into the investments that your company offers. You have shown knowledge in great
length. Keep up the good work.”
— Victoria P. Beaverton, OR

Crude Energy Headquarters
1910 Paciﬁc Ave. Suite 7000
Dallas, Texas 75201
U.S.A
CONTACT US
For more information on direct investing
opportunities & join the American oil boom!
Phone: (214) 935-1583
Email: investing@crude.com
www.crude.com

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