Estate of H.A. True, Jr. - Page 54




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                   3.  True Oil and True Drilling                                     
              Following termination of the True-Brown partnerships in                 
          1954, Dave and Jean True formed True Oil Co. (True Oil) and True            
          Drilling Co. (True Drilling).  These were Wyoming general                   
          partnerships in which Dave and Jean True initially owned 95-                
          percent and 5-percent interests, respectively.                              
              True Oil acquired working interests in oil and gas                      
          properties and looked for new reserves.  In general, True Oil               
          would do farm-in deals (do exploratory drilling on prospects                
          identified by others) rather than develop its own deals.  Dave              
          True was an operator, who actually drilled and operated wells and           
          arranged to sell production, rather than a promoter, who sells              
          non-operating royalty interests to third parties.  True Oil’s               
          customers included both related and unrelated parties; however,             
          on average, about half of its production was purchased by related           
          entities.                                                                   
              True Drilling owned and operated drilling rigs and performed            
          contract drilling services for related and unrelated customers.             
          True Oil was one of True Drilling’s largest customers.                      
              Dave True was a “wildcatter”.  He enjoyed the challenge of              
          drilling exploratory wells on leased acreage far from established           
          fields, rather than drilling developmental wells on established             
          fields.  True Oil’s early efforts were rewarded with discoveries            
          of fields in the Rocky Mountain region (Wyoming, North Dakota,              






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Last modified: May 25, 2011