Meta: Honesty, integrity, and transparency have always been part of oil and gas giant Gulf Coast Western’s DNA, and it’s got the client reviews to prove it.
In show business, insiders sometimes say you’re only as good as your last review. But in the oil and gas industry, forging long-lasting partnerships based on trust, transparency, and integrity is the true measure of a company’s worth. For Dallas-based oil and gas exploration/venture capital firm Gulf Coast Western, those ideals are the core pillars on which the firm has built its business and stellar reputation since 1970.
Of course, good reviews don’t hurt, either — and the firm’s got plenty of those as well. Like this one for instance:
“I first invested with Gulf Coast Western three years ago as a way to diversify my assets. I wanted an alternative to the stock market. Since my initial investment, I’ve participated in six additional joint venture partnerships with Gulf Coast Western,” wrote former Greyhound CEO Frank Schmieder. “Throughout each partnership, my representative was always very informative and kept me up to date. I have found the people at Gulf Coast Western to be forthright, professional, and honest. I have in the past, and will continue to, recommend others invest with Gulf Coast Western.”
Gulf Coast Western Places a High Value on Partner Communication
When Thomas Fleeger — father of current Gulf Coast Western CEO Matthew Fleeger — founded his fledgling oil and gas exploration firm, honor and integrity were engineered into the company’s DNA. Since those early days, Gulf Coast Western has expanded the company footprint from its original Texas holdings to encompass sites in Kansas, Alabama, Mississippi, Louisiana, Oklahoma, and Colorado. In tandem with that growth, the company’s reputation for fair and forthright business practices burgeoned as well, as new venture partners became repeat venture partners, spreading the word of Gulf Coast Western’s commitment to business relationships that were transparent, mutually beneficial, and built to last.
In business relationships, repeat investors are the surest sign of a company’s trustworthiness, which is why educating prospective venture partners about the potential rewards and the possible risks of any investment opportunity has always been essential to Gulf Coast Western’s core values. As reported in Boss Magazine, “At Gulf Coast Western, CEO Matthew Fleeger (who took the helm in 2009) places a high value on investor communication. This practice commands respect from the company’s partners and other industry professionals. Over time, mutually beneficial relationships often lead to subsequent investment opportunities. A full 70% of Gulf Coast Western’s partners have been involved in multiple joint ventures.”
In Oil and Gas Investing, Knowledge Is Power
Of course, in oil and gas, as with any investment, no reputable firm can or should give a 100% guarantee of profit to its partners. Even the most painstakingly researched and professionally executed project can be impacted by unpredictable, fluctuating, and even volatile factors — whether natural or geopolitical — over which no one has control. However, by carefully and thoroughly providing partners with research and market analysis, Gulf Coast Western arms its partners with all the information required to make informed decisions. From there, it’s up to the partners to decide if they’re comfortable with the risk and reward profile presented and proceed — or pass — accordingly.
John Engel, Gulf Coast Western’s chief operating officer, believes that for solid business relationships to flourish, information has to flow both ways. Investors who don’t perform due diligence prior to getting involved in any capital venture do so at their own peril.
“I’ll use myself as an example. I grew up in the oil industry in Houston. I went out on my own and went into finance,” Engel revealed in a recent episode of the “Wealthability for CPAs” business podcast. “When I found this company, the first thing out of their mouth was, ‘We drill oil and gas wells and there’s risk involved. If we drill a dry hole, we don’t make any money because no oil [comes] out of the ground. Before we go through any economics as to why we’re drilling these wells, you need to understand the risk.’ And the first thing I thought was, ‘OK, this is different. It’s not all rainbows and unicorns and we’re going to all be millionaire oil tycoons.’
“So I went to work here, coming from a compliance background in the securities industry, and I looked this company up and down — and you’ve got to do the same thing.”
Education Is the Key to Oil and Gas Transparency
How do investors know if an oil and gas company is on the up and up? Engel detailed some resources prospective venture partners can avail themselves of to vet prospective partners. A good place to start is with the Better Business Bureau. “That’s one of the easiest ways to check out a company, just for the sake of ease, checking them out, making sure they have good reviews, that they do business the right way, and then go from there,” he said.
In addition, Engel noted that legitimate companies provide prospective clients with detailed financial statements. He also cited Dun & Bradstreet reports as another solid resource. He said investors can also consult the secretaries of state in which the companies operate to find valuable information.
One final fact-check on an oil and gas investor’s due diligence list is to verify whether or not the project has an American Petroleum Institute number. The API assigns a unique number to every oil and gas well. These numbers are used to identify and track each oil and gas well. “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 pointed out. Having a registered API number is proof that the company under consideration is legitimate and verifies them as a working interest partner.
Conversely, not having an API number, or not being able to readily obtain it from anyone who is promoting a project, should be a big red flag. “It should be easy for that promoter, or whoever’s sending this project to your client, for them to prove that they are a part of this well and not just some fly-by-night [operator] working in a basement in Nigeria. So, there are ways of verifying it, and it should be pretty easy. If it’s not … your antenna should be on high alert.”
Gulf Coast Western Invests in Firsthand Education for Its Investors
As impressive as facts and figures might be to a potential investor, Engel believes a hands-on education is best for a venture partner. That’s why Gulf Coast Western routinely schedules field trips to its sites so clients and potential clients can see firsthand what goes into producing the product they hope to profit from.
“I invite our partners to come up and look at some of the wells,” Engel said, “because very much like real estate, there’s no better way of seeing your money go to work for you than watching an oil well being drilled … That’s the ultimate way of checking them out.”
He added that while many operators might say, “‘OK, Mr. Tire Kicker, I understand you want to do your due diligence,’” not all of them are going to fly their clients out to see their oil wells in operation.
This up-front, hands-on philosophy is one of the main reasons Gulf Coast Western’s investment partners keep coming back to sign on for new projects. It’s also the reason they continue to laud the company’s performance with exemplary reviews such as this one:
“I’d had a bad experience with an oil and gas drilling investment many years ago and swore I would never do it again,” five-star BBB reviewer Bob C. recalled, but Gulf Coast Western changed his mind. “I met some of the associates at a convention and they explained what they were offering in a very professional and transparent manner. Their follow-up was, and continues to be, incredible,” he extolled.
He added, “Another important item for me has been the written communications which are obviously positive, but sober, too, identifying all of the risks involved while expressing potential upside using hypotheticals with conservative and realistic assumptions. GCW even invited us, the investor partners, to travel to see/experience the projects firsthand. While the company-sponsored trip was top notch, the most important thing was the opportunity to ‘kick the tires’ of the very ventures in which we invested. I learned a lot!”
