Quickstart     Cashflow File     Day     Participation     Other Financiers    Map     Oil Rights     Well Depths     Partnership     Dealmaker

  Shotgun Agreement     Running in the Red     Bankruptcy     Share Price     Corporate Position     Fast Track     Winning

  Leaving the Seminar  Hostile Areas  Subsidies  Joint Ventures  Administrator  Drilling Contractor  Rig Move Cost  Depletion

  Expiry of Rights  JV Leader  JV Drilling Decision    Posting Land    Waiving Extension Fees 

To drill a well, you need three types of partners:

1. a drilling contractor
2. the owner of the oil rights for location
3. investors to cover the basic drilling costs, the drilling contractor's fee, and the rig move.
    

The owner of the oil rights is essential for the deal. The owner gets a cut of the revenue if the well is successful.

The investors pay all the costs. All investors must have a positive bank balance on the day the deal is submitted to the administrator.  The drilling contractor and the oil right owner can also be investors.

The drilling contractor usually wants a fee for using his rig. He can forego this fee in exchange for an extra cut in the revenue.

If the drilling contractor's rig is idle, the well will be drilled immediately. If the rig is working on other wells, the new well will be placed on the contractor's list. The well will be drilled after the other wells on the list are finished.

It is possible to drill a well with just one financier if that financier has a drilling rig, owns the oil right, and has a positive bank balance. Of course, there wouldn't be much spreading of the risk with his kind of "deal."

The Changing Dynamics The dynamics of an OilFinancier seminar change as time passes. In the first 100 OF Days, you really need to work on spreading risk by making deals with three or more partners. You won't drill many wells because you can't afford it. But don't underestimate this "poor oilman" stage of OilFinancier: use it to build positive relationships for the middle 100 days.  In the middle 100 Days, your cash flow will increase to the point where you look to efficiency in your  dealmaking. You will have a tendency to use fewer partners and rely on those financiers with whom you have developed good relations to get a deal done quickly. With this efficiency, you can drill more wells, and these wells will likely be more capital intensive. In the last 100 OF Days, your company should be quite wealthy. You should refrain from silly decisions even though you can afford them.  Astute financiers should be looking 100 OF days ahead when making their decisions to be in a good position as the dynamics change.

If the drilling contractor or oil right owner is in the red, the deal can still go through as long as they are not investors.

The condition for a positive bank balance held by investors shall apply on the day the agreement is handed to the administrator. If any investor is in the red at this time, the dealmaker will have to resubmit the agreement when all investors have a positive bank balance. Any investor can go in the red after the administrator accepts the agreement―even if the agreement has not been confirmed by all partners.  

If an investor happens to be in the red when the well spudded, the deal is still carried through. That investor just goes further in the red.

You and your potential partners should first negotiate the terms of your deal using the OF agreement as a guide. Fill in the blanks as per what you have agreed to, then have the dealmaker submit it  the administrator.

The administrator will send all partners the agreement, who must confirm the terms within 3 OF Days. Then the well will be drilled or placed in the drilling contractor's list.

If the deal has any subsequent wells, the wells will be drilled after the first well is finished without any need for input from the partners.

If the deal has any conditional wells, the wells will be drilled only if the conditions are fulfilled. 

If the confirmation from all parties is not attained within 3 OF Days, the deal shall be considered a shotgun deal, and the dealmaker shall be subject to a fine.

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