April 23, 2018 Comments (0) Blog, Current Investigations

Reef 2011 Private Drilling Fund LP – Recover Investment Losses

Reef 2011 Private Drilling Fund

REI Bakken Acquisition and Development, L.P Purchases Fund’s Assets

Are you concerned about your investment losses in Reef 2011 Private Drilling Fund LP? If so, The White Law Group may be able to help you recover your losses by filing a FINRA Dispute Resolution claim against the brokerage firm that sold you the investment.

Reef is an oil and gas company whose sponsored entities currently own an interest in approximately 3,000 wells in the United States, according to its website. The company’s activities are located in 15 states with the core areas concentrated in the Bakken-Three Forks formations in North Dakota, the Permian Basin in West Texas and the Mid-continent.

The company often raises money for investments through Regulation D private placement offerings like the company did for Reef 2011 Private Drilling Fund LP.  These Reg D private placements are then typically sold by brokerage firms in exchange for a large up front commission, usually between 7-10%.

Update for Investors – Reef 2011 Private Drilling Fund

As we told you previously, Reef Oil & Gas Partners, L.P. as Managing General Partner, was looking to sell Partnership assets in order to reduce the Partnership’s outstanding loan balance and avoid foreclosure.

According to letter to investors dated February 1, 2017, REI Bakken Acquisition and Development, L.P., and affiliates purchased the assets of Reef 2011 Private Drilling Fund, L.P.

“The loan from Texas Capital Bank is now paid in full. The bank waived, or forgave, approximately $4 million of the approximate $8.6 owed to it by Reef 2011 Fund. The Bank released all liens and claims on Reef 2011’s oil and gas properties.”

Further, the letter states that REI Energy, LLC is sponsoring the new Partnership and continues to invite accredited investors to participate.

Are Alternative Investments Suitable for you?

The trouble with alternative investment products like Reef 2011 Private Drilling Fund LP, is that they involve a high degree of risk. They are typically sold as unregistered securities which lack the same regulatory oversight as more traditional investment products like stocks and bonds.  An additional risk inherent to Reef Oil and Gas offerings is also the general risk that comes with the energy market – a market that has seen enormous losses over the last few years.

Many oil and gas LPs have high expense ratios, and due to the decline in the overall health of the oil and gas market, are suffering. Some are on the brink of default, or worse yet, bankruptcy.  Such an outcome is extreme, but not unforeseen. It only highlights the unsuitability of these investments for most retail investors – particularly in large concentrations.

Broker dealers that sell alternative investments are required to perform adequate due diligence on all investment recommendations. They must ensure that each investment is suitable for the investor in light of the investor’s age, risk tolerance, net worth, financial needs, and investment experience.

If a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment they may be liable for investment losses.

To determine whether you may be able to recover investment losses incurred as a result of your purchase of Reef 2011 Private Drilling Fund LP or another Reef Oil and Gas private placement investment, please contact The White Law Group at 1-888-637-5510 for a free consultation.

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida. For more information on the firm, visit www.WhiteSecuritiesLaw.com.