Who Qualifies to Invest in Oil Wells?
Oil and gas working interest deals are private securities offerings available only to qualified investors. Our offerings are made under SEC Rule 506(c), which means every investor's accredited status must be verified — not just claimed. Here is how qualification and verification actually work.
Read this first: Anything on this page is a summary of SEC rules, not the rule text, and not legal, tax, or investment advice. Meeting an accredited-investor test says nothing about whether a particular investment is appropriate for you. Neither the SEC nor any state regulator reviews, approves, or endorses these offerings.
Accredited Investor Requirements
You are an accredited investor if you meet any one of the categories in SEC Rule 501(a). The two most common are income and net worth.
Income Qualification
Over $200,000 Individual Income
OR over $300,000 joint income with a spouse or spousal equivalent
- You must have reached that level in each of the two most recent years, and have a reasonable expectation of reaching it again in the current year. All three years matter.
- If you rely on the joint $300,000 standard, apply it consistently — joint income in both prior years and a joint expectation for the current year. You cannot use your individual income for the prior years and joint income for this one.
- W-2, 1099, and business income all count. This is a gross income test, not a take-home test.
- A spousal equivalent — a cohabitant in a relationship generally equivalent to a spouse — may be used in place of a spouse.
Net Worth Qualification
Over $1,000,000 Net Worth
Individually, or jointly with a spouse or spousal equivalent — excluding your primary residence
- Net worth means assets minus liabilities. If you count a spouse's assets you must also count that spouse's liabilities. The assets do not have to be held jointly.
- The value of your primary residence is excluded from assets. Mortgage debt secured by the residence is generally also excluded from liabilities — but only up to the home's estimated fair market value.
- Debt secured by the residence in excess of the home's fair market value counts as a liability and reduces your net worth.
- 60-day rule: if the balance of debt secured by your primary residence increased in the 60 days before you invest — other than to acquire the residence — that increase counts as a liability. Cashing out home equity does not create qualification.
- Investment accounts, other real estate, and retirement accounts count toward assets.
Other Ways to Qualify
The SEC's 2020 amendments to Rule 501(a) added routes that have nothing to do with your income or net worth. Many people who assume they do not qualify actually do:
Professional licenses
Natural persons holding a Series 7, Series 65, or Series 82 license in good standing qualify regardless of income or net worth. This covers a large number of registered representatives, investment adviser representatives, and private securities offering representatives.
Knowledgeable employees
Knowledgeable employees of a private fund qualify for investments in that fund — including certain executive officers, directors, general partners, and employees who participate in the fund's investment activities.
Spousal equivalents
A spousal equivalent may be treated the same as a spouse for both the joint income and joint net worth tests, so unmarried partners can pool finances to qualify.
Family offices and family clients
A family office with at least $5,000,000 under management — not formed for the specific purpose of acquiring the securities, and whose investment is directed by a person with the knowledge and experience to evaluate it — qualifies, as do its family clients.
Entities holding $5M+ in investments
Any entity owning more than $5,000,000 in investments and not formed for the specific purpose of acquiring the securities offered qualifies — a broader category than the older list of specific entity types.
Registered and exempt reporting advisers
SEC- and state-registered investment advisers and exempt reporting advisers were also added as qualifying entities.
This is a plain-English summary of Rule 501(a), not the complete list and not the rule text. If you think you might qualify under a category not described here, say so — the rule is broader than most people expect.
Quick Check: Do You Likely Qualify?
You are likely accredited if ANY ONE of these is true:
- Individual income over $200,000 in each of the two most recent years, and you expect the same this year
- Joint income with a spouse or spousal equivalent over $300,000 in each of the two most recent years, and you expect the same this year
- Net worth over $1,000,000, individually or jointly, excluding your primary residence
- You hold a Series 7, 65, or 82 license in good standing
- You are investing through an entity, trust, or family office that meets the $5,000,000 tests above
This is a preliminary screen only. Formal third-party verification is required before any investment.
Entity Investors
Businesses, trusts, and other entities can also invest:
- LLCs / Corporations: qualify if all equity owners are accredited, if the entity has more than $5M in assets, or under the newer test if the entity owns more than $5M in investments — in each case provided the entity was not formed for the specific purpose of acquiring the securities offered
- Trusts: more than $5M in assets, not formed for the specific purpose of the investment, and directed by a sophisticated person. Revocable grantor trusts are often looked through to the grantor instead — ask.
- Family Offices: at least $5M under management, plus their family clients
- IRAs / Self-Directed Retirement Accounts: accreditation generally looks to the beneficial owner — but the tax consequences differ substantially. Read this before using retirement money →
Verification Process
Because our offerings rely on Rule 506(c), the issuer is required to take reasonable steps to verify that every purchaser is accredited. A checkbox on a questionnaire is not enough on its own — self-certification alone does not satisfy Rule 506(c).
1. Preliminary Questionnaire
You complete an investor qualification form covering income, net worth, and category. This is a screen, not verification — it tells us which verification path applies to you.
2. Third-Party Verification
Your status is verified through an independent verification service or by a written letter from your CPA, attorney, registered broker-dealer, or SEC-registered investment adviser confirming they have taken reasonable steps to verify your status.
3. Review Documents, Then Invest
Only after verification is complete do you review the private placement memorandum and subscription documents and decide whether to fund.
What verification usually looks like in practice. The SEC has described several non-exclusive methods an issuer may use:
- Income route: review of IRS forms reporting your income for the two most recent years — W-2, 1099, Schedule K-1, or Form 1040 — together with a written representation that you reasonably expect to reach the same level this year.
- Net worth route: review of bank, brokerage, or other statements and, where relevant, third-party appraisals dated within the prior three months, together with a consumer credit report and a written representation that all liabilities have been disclosed.
- Professional letter route: written confirmation from a registered broker-dealer, an SEC-registered investment adviser, a licensed attorney, or a certified public accountant that the person has taken reasonable steps to verify your status within the prior three months. Most investors prefer this route because it does not require handing tax returns to the sponsor.
- Prior verification: where you were previously verified, a written representation that you continue to qualify may be relied on for a limited period.
The verification method used for any specific offering is set out in that offering's subscription documents. Ask before you begin so you can gather what you need.
Minimum Investment Requirements
| Project Type | Typical Minimum | Notes |
|---|
| Single Well Working Interest | $25,000 - $50,000 | Direct ownership in one well |
| Multi-Well Program | $100,000 - $250,000 | Diversified across multiple wells |
| Our Current Projects | $185,000 | View details → |
Minimums are set by each offering and are subject to change. These are general industry ranges, not an offer.
Using Retirement Money: Read This First
An IRA or other retirement account can hold an oil and gas working interest through a self-directed custodian — but the economics inside a retirement account are meaningfully different from investing personally, and several rules catch people by surprise:
- UBTI. Income from an operating working interest is generally unrelated business taxable income to the account. If gross UBTI reaches $1,000 in a year, the account files Form 990-T and pays tax from account funds at trust rates — a compressed schedule that reaches the top 37% rate at roughly $16,000 of taxable income for 2026.
- No personal IDC deduction. The intangible drilling cost deduction stays inside the account. You cannot claim it on your own return. If a year-one deduction against your personal income is the reason you are investing, a retirement account is the wrong vehicle.
- Prohibited transactions. Under IRC §4975 you and the account are separate. Paying the investment's expenses out of your own pocket — or any other self-dealing — can be a prohibited transaction, and the consequence can be disqualification of the entire IRA, treated as a full distribution.
- Liquidity for cash calls. Working interests generate obligations: capital calls, operating costs, and eventually plugging and abandonment. The account must hold enough cash to meet them. An account invested to the last dollar has no lawful way to pay the next bill.
Full self-directed IRA guide → IRA FAQ →
Why These Requirements Exist
Working interest investments carry real risks:
- Wells can be dry, or produce far less than projected
- Investments are illiquid — there is no ready market and you may not be able to sell at all
- Oil and gas prices fluctuate, sometimes sharply
- Operating costs can exceed revenue in some periods, and working interest owners share those costs
- You can lose your entire investment
The accredited-investor rules exist so that securities can be sold privately, without the disclosure required in a registered public offering, to people the rules presume can bear the economic risk of loss and can obtain information for themselves. That presumption is about capacity, not about merit. No regulator reviews, approves, or endorses these offerings, and qualifying to invest is not the same as an investment being suitable for you. Read the risk factors →
Related Qualification Topics
Think You Qualify?
Complete our confidential investor questionnaire to begin the screen. Formal verification follows before any investment.
