Springs-based HEI Resources wins state court battle

Filed under: Daily News | Tags:, ,

After a four-year challenge, Colorado Springs-based oil and gas exploration company HEI Resources Inc. received a favorable judgment from Denver District Court.

The Securities Commission filed the suit to expand its regulatory authority by designating interests in joint -venture partnerships as securities, despite contrary rulings by a federal district court, the Colorado Securities Board, and a Colorado jury, according to a recent HEI news release.

Following a seven-day trial–during which the court heard testimony from experts and more than a dozen joint-venture partners–the Denver District Judge Michael A. Martinez issued a 33-page order, outlining findings in the case and his decision that joint-venture interests offered by HEI are not securities.

“It’s unfortunate that I have spent the time, money, and emotion defending against these baseless claims, but I have an obligation to my employees and my partners to fight these claims and preserve the ability of my partners to continue to enjoy the benefits of direct participation programs,” said President and CEO Reed Cagle in the news release.

“Colorado is my home,” said Cagle. “I have raised my family here, and HEI supports the local economy, multiple charities, and provides jobs and support for dozens of families in Colorado. This ruling is a tremendous victory for us all.”

Cagle founded HEI Resources in 1997 for the acquisition, exploration and development of domestic oil and gas reserves.

For more information, visit www.heipartners.com.

One Response to Springs-based HEI Resources wins state court battle

  1. Oil & gas joint venture general partnerships are for BIG boys and girls who have money in the RISK portion of their investment portfolio that needs to be put to work. If a well (or wells) hits, the resulting income could exceed the entire value of the entire investment portfolio. If it’s a dry hole the investor gets virtually a total write off. So, if you make enough money to need a tax deduction and like the idea of owning an oil well without having to get covered in oil, this is the vehicle to do it. While one profile is that of a person who likes to go to Las Vegas a couple times a year, many otherwise conservative high net worth investors find it a great way to diversify and avoid the worst, most rigged, casino in the world: Wall Street.

    Ask about the track record of the company and the particular oil field. There is a big difference between what’s called a “show” (we hit oil but not enough to make it economically viable) and a well that actually produces reliably. There is significant conjecture (which needs to be substantiated) about the viability of “fracked” horizontal wells. Supposedly many appear to be “gushers” for a year or so and then tail off. So be sure to get information about how your general oil field is performing. If you would like more insight you’re welcomed to contact me at Greg@pofrLLC.com. I’m not in the business but know some of the “good guys” who are.

    Greg Olinyk
    October 31, 2013 at 4:08 pm