Anyone weighing an oil and gas venture faces a basic question: how do you know the company asking for your money is legitimate? John Engel, chief operating officer at Gulf Coast Western, offered a practical answer during an appearance on the “Wealthability for CPAs” podcast. His comments were later highlighted in a paid feature that ran in the Santa Clarita Valley Signal in May 2024.

Engel came to Gulf Coast Western with a compliance background from the securities industry. He said he “looked this company up and down” before joining, and he urges prospective partners to apply that same scrutiny to any operator they consider.

A Starting Checklist

His first suggestion is simple. Engel pointed to the Better Business Bureau, calling it “one of the easiest ways to check out a company.” From there, he recommended reviewing detailed financial statements, which he said legitimate companies provide to prospective clients. Dun & Bradstreet reports offer another layer of insight, and secretary of state offices in the states where a company operates can supply useful records as well.

The final item on his list is specific to drilling. The American Petroleum Institute assigns a unique number to every oil and gas well, and those numbers are used to identify and track each one. “In almost every case, if you’re going to be participating in an oil well, one of the easiest things to find out is if it’s permitted,” Engel said.

When the Answers Don’t Come Easily

According to Engel, a promoter should have no trouble producing that number. If a project lacks one, or if the person pitching it cannot readily supply it, he considers that a serious warning sign. “If it’s not … your antenna should be on high alert,” he said.

Gulf Coast Western, founded in 1970, frames this guidance as part of a broader commitment to investor education. The feature notes that no reputable firm can promise a profit on any well, since drilling outcomes depend on natural and geopolitical factors beyond anyone’s control. Engel’s checklist places some of the responsibility on investors themselves, who must decide whether a given opportunity fits their comfort level before committing capital. Visit this page for more information.

More about Gulf Coast Western on https://www.zoominfo.com/c/gulf-coast-western-llc/343718444