FREQUENTLY ASKED QUESTIONS

A Direct Participation Program (DPP) is an investment structure that allows accredited investors to directly participate in oil and gas drilling operations. Unlike investing in energy stocks or ETFs, DPPs provide direct ownership in the underlying assets, pass-through tax benefits, and proportional revenue from production.

Under SEC Rule 501 of Regulation D, an accredited investor is an individual with a net worth exceeding $1 million (excluding primary residence) or annual income exceeding $200,000 ($300,000 with spouse) for the past two years with expectation of the same. Certain entities with $5 million+ in assets also qualify.

Minimum investment amounts vary by project and opportunity. Typically, direct participation programs require minimum investments ranging from $25,000 to $100,000. Contact our investor relations team for current opportunities and their specific requirements.

Getting started is straightforward: 1) Complete our contact form or schedule a call with our investor relations team. 2) We'll discuss your investment goals and verify accredited investor status. 3) Review available opportunities and private placement documents. 4) Complete subscription documents and fund your investment.

Intangible Drilling Costs (IDC) represent 60-80% of well costs and include labor, chemicals, mud, and other non-salvageable expenses. Under IRS tax code, 100% of IDC is deductible in the year incurred. For example, a $100,000 investment with 75% IDC allows a $75,000 deduction in Year 1.

The Small Producer's Exemption allows investors to receive 15% of gross production income tax-free through the depletion allowance. This continues throughout the productive life of the wells, effectively reducing your tax burden on ongoing production income.

Yes. Working interest in oil and gas is specifically excluded from passive activity rules by the IRS. This means losses from working interest investments can offset ordinary income (W-2, business income) regardless of active participation, unlike most other investments.

Investors receive K-1 tax documents detailing their share of income, deductions, and credits. These are typically issued by March 15 following the tax year. Our investor portal provides easy access to all tax documents.

Working interest means you share in both revenues AND expenses of drilling and operating wells. You receive larger potential returns but also bear proportional costs. Royalty interest provides a percentage of revenue with no expense obligations, resulting in lower but more predictable returns.

Timeline varies by project type. Development wells in proven areas may begin production within 3-6 months of drilling. Revenue distributions typically begin within 60-90 days of first production. Drilling projects may take 12-24 months before production begins.

Production revenue is typically distributed monthly or quarterly after deducting operating expenses and operator fees. Distributions are made via ACH direct deposit or check. All distribution history is viewable in your investor portal.

Oil and gas investment carries inherent drilling risk. If a well is unproductive, investors still receive tax deductions for drilling costs. We mitigate risk through thorough geological analysis, focusing on proven formations, and development drilling in established fields.

Nexus Petroleum focuses on premier U.S. oil and gas basins including the Permian Basin (West Texas/New Mexico), Eagle Ford Shale (South Texas), and Midland Basin. We concentrate on proven, prolific formations with established infrastructure and documented production history.

All investors receive 24/7 access to our secure investor portal where you can view investment details, production data, distribution history, tax documents, and project updates. We also provide regular written updates on operations and market conditions.

Nexus partners with experienced, reputable operators who have proven track records in our areas of operation. All operators are vetted for safety records, operational efficiency, and regulatory compliance. Operator details are provided in project-specific offering documents.

Oil and gas direct participation investments are generally illiquid and should be considered long-term investments. While interests can sometimes be transferred or sold on the secondary market, there is no guaranteed market and this should not be expected.