- 24 -
and Fields could have given him was that the partnership was
suffering large losses, as apparently had been planned.
Petitioner testified that his investment focus was on
"finding an oil well." It would have taken only modest effort to
determine, likely from the partnership itself, that Mid Continent
had not followed through on any of the three stated "profit
seeking" activities.
In 1983, after 2 years of operations, the partnership had
not drilled for oil and gas in the Overthrust Belt. There was no
drilling by the partnership in Oklahoma and Tennessee.8 And
there was still no operational Terra-Drill in existence 2 years
after commencement of the license payments for the drill. The
nonexistence of the drill is hardly a "technical"9 matter. The
Terra-Drill license payments to Mitchell, financed in large part
by long-term notes, were largely responsible for the partnership
losses that were passed through to the partners.
We have considered the other arguments raised by petitioners
and we find them to be without merit. We find that petitioners
8Instead of conducting drilling, the partnership substituted
partial working interests in other than the original proposed
sites. The sites evidently had poor production potential.
9The "technical" problems to which petitioners allude are
substantial engineering problems that must first be overcome
before an operational Terra-Drill can successfully be designed.
Because of the technical problems there was no drill. The
partnership failed because from the start there was no drill and
none was ever developed.
Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 NextLast modified: May 25, 2011