Charles A. Greene and Christine J. Greene - Page 24

                                       - 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  Next

Last modified: May 25, 2011