When you invest in a Direct Participation Drilling Program it is required by law that you are furnished a full disclosure of the drilling prospect. This information is provided in the Memorandum, a.k.a. Private Placement Memorandum, Confidential Information Memorandum or Prospectus. This memorandum should be provided to any investor that participates in a Joint Venture, General Partnership, Limited Partnership, Master Limited Partnership or Undivided Fractional Interest Ownership. In most cases the Memorandum is prepared by an attorney that has experience with Securities and Partnerships. Most qualified attorneys will charge between $8,000.00 and $15,000.00 to prepare an extensive Memorandum to the Issuer of the Drilling Program. In many cases, companies that make an offer of Direct Participation, do not prepare an adequate Memorandum for their potential investors and therefore do not fully disclose the necessary information that an investor needs to evaluate the entire offering. Not having a properly prepared Memorandum could be a legal issue for the company making the offer and thus leaving the investor exposed to legal issues with State Securities Agencies. In most states, the Securities Division requires that you submit a copy of the Memorandum to their offices within 15 days of the sale. (Blue Sky Registration) The Issuer also has to submit a copy of the Memorandum to the State Securities Agency in the State the offering is being made. This should be done before the offering is even made to a potential investor.

The following Sections, (Table of Contents) should be included in a properly constructed Oil and Gas Drilling Program Memorandum. Each section should include an in depth overview of that section's topic.

TABLE OF CONTENTS

Summary of the Offering 
Risk Factors 
Terms of the Offering 
Plan of Distribution 
Proposed Activities 
Additional Assessments 
Allocation of Interests 
Use of Proceeds 
The Initial Offerings 
Participation in Profits and Losses and Distributions 
Compensation and Benefits to the Managing Partner and its Affiliates 
Management 
Conflicts of Interest 
Prior and Current Activities of Managing Partner and Affiliates 
Responsibilities and Indemnification of the Managing Partner 
Tax Aspects 
Competition, Markets and Regulation 
Summary of the Partnership Agreement 
Other Matters 
Related Party Transactions 
Financial Condition of the Partnership 
Legal Proceedings 
Definitions

Exhibits: (these attachments are general in nature)

A Agreement of (Type of Partnership) 
B Geological Reports 
C Forms of the Turnkey Contracts 
D Form of Operating Agreement 
E Subscription Documents

A properly prepared Memorandum will always protect the Issuer who is making the offering, but it should also be fair to the investor. The Investor is the life-blood of any oil and gas company. Without the Investor, the company ceases to exist. Any well constructed Memorandum should be constructed to be fair to both parties involved in the drilling program.

It is unfortunate that many potential investors fail to read any of the material in the Memorandum before they purchase working interest in the program. Many companies are hoping that is the case, because they may have prepared a Memorandum that is inadequate as to "Full Disclosure". Alway remember, that when you sign the contracts, you are agreeing to all of the terms in the memorandum.

When you purchase Working Interest in a drilling program, make sure that the investment is registered with your State Securities Division. Remember that all companies are required to file a copy of the Memorandum with State Securities Agencies in your state within 15 days of your purchase. There are a few states that do not require this registration. The memorandum that is submitted will be scrutinized by that State Securities Agency, thus giving some validity to that Memorandum's construction. Ownership in Oil and Gas Wells can be extremely rewarding, but you must take your time and read the the Memorandum.

Duane Stephens
http://www.indepthexploration.com