Oil and Gas Drilling Programs
Authors: Muir J. Lawrence 
Published: December 2007

Abstract
Oil and gas drilling programs provide a certain amount of capital for finding and producing oil and gas. These programs offer interests in and raise money for the separate activities of exploration, development, purchase of producing properties, or any combination of such. The number of programs filed with the Securities and Exchange Commission for 1970 was 155, and the amount of securities registered amounted to 1.8 billion. The number and amount of filings have increased each year since 1966. The aggregate amount of securities for individual programs has varied materially, but 90.9 percent of the programs filed have been for amounts below $25 million. Filings where the minimum offering price is between $5,000 and $20,000 included 83.9 percent of the programs registered in 1970. The offer and sale of 70.3 percent of the securities registered in 1970 through percent of the securities registered in 1970 through subscriptions, assessments, private programs, and individual drilling ventures is estimated to between 25 and 30 percent of the total aggregate dollar amounts of the programs filed, or between $464 million and $570 million. Present trends in oil and gas programs are toward the use of limited partnerships, maximum tax write-offs, and repurchase plans, the increase in number and amount of filing, the incorporation of new features and ideas in prospectuses, the developing interest of the financial community, and increased competition and pressure for sales. These trends have increased the need for more disclosure, more regulation, and more self-regulation. The need to find more oil and gas to the investor interests, the use of misleading sales literature, the self-dealing and excessive compensation attributable to some programs, the need to reduce investor costs, the possible change in the tax climate, the unfavorable publicity resulting from reported financial troubles of some programs, and the possibility of new legislation programs, and the possibility of new legislation appear to be problems of concern at the moment. The simple exploration program, which provides for investor participation with regular operators, appears to be the type of program best suited for exploration for oil and gas. Because of the continuing availability of money, the demand for crude oil, and the current interest of the financial community, oil and gas drilling programs should be popular in the 1970's and programs should be popular in the 1970's and should be a source for additional exploration money, provided the problems which beset them can be satisfactorily solved.

Introduction
The oil and gas drilling-program industry is an industry that we in the Securities and Exchange Commission consider to be distinct and separate from the giant oil and gas industry. The oil and gas drilling-program industry is a young industry, a needed industry, an aggressive industry, a changing industry, and I must say, a much criticized industry, that appears by its very nature to carry the elements of its own destruction. Drilling programs in the last several years have become an important new development for financing the drilling oil and gas wells. But all programs do not have the same purposes. For some, the entire amount of money raised is to be used mainly for the financing of exploration activities. others apply 100 percent of their investment money principally to the drilling of semi-proven or proven principally to the drilling of semi-proven or proven acreage, while some use their subscribed amounts chiefly for the purchase of producing properties. A number of the programs now combine several of these proposed activities so that a given program will devote, for example, about 40 percent of its activities to exploration and 40 percent to the drilling of semi-proven and proven acreage, leaving 20 percent for the purchase of producing properties. Any combination of two or more of properties. Any combination of two or more of these activities may be found in a number of the current drilling programs.