Galaxy Partners Drilling Fund No.1, Ltd.

This is not a new concept. Drilling funds similar to this one have been around for forever. The concept is based upon the reality that companies who generate prospects for oil and gas exploration rarely want to take one hundred percent of the deal for themselves. As discussed in the “For Investors” section of this website, oil and gas exploration is first and foremost a numbers game.  Not every exploratory well is going to be successful. But the returns for a successful well can easily more than make up for a lot of dry holes. The risk-to-return figures represented by typical oil and gas exploration prospects favor success… But only if you participate in enough prospects so that the numbers naturally even out in your favor.  You take a huge risk if you put all of your money into only one or two deals. But the more deals you participate in, the better your chances that something is going to work out and make everything worthwhile. That is why we put this fund together… So we can spread our money out into as many quality deals as possible. And, that is why the companies who generate prospects for oil and gas exploration are always looking for partners… They don’t want to take one hundred percent of the deal by themselves. So, they look for partners... Partners just like the Galaxy  Partners Drilling Fund No. 1, Ltd. 

Once we have our money together, we put the word out that we have X million dollars to spend for non-operated interests in top-notch oil and gas exploration prospects. And, once people find out we are looking for deals,  the companies looking for partners are happy to make presentations to us. Usually, at this point, these companies have already spent several hundred thousand to a million dollars or more acquiring seismic data and oil and gas leases, and are looking for partners to participate in the testing of their idea by the drilling of an exploratory well. Usually, but not always, these deals are ready to drill, subject only to getting  the funds together for drilling the initial well. 

So… We put the deals that are presented to us through our own evaluation process, and make our elections as to which ones we want to participate in. Ideally, after reviewing and evaluating many deals, the partnership will end up participating in five deals or even more if possible. Approximately 60% of the fund’s capital will be committed for leases and estimated drilling costs and expenses through casing point. The other 40% will be kept in reserve for completion costs, additional leases, any cost overruns, and the development drilling. In the event additional monies are needed to complete wells or drill development wells, or acquire additional leases, a call for additional capital will be made in accordance with the Partnership Agreement.

Stardust is owned and operated by an individual who has learned the value of keeping things simple, which translates into more of your investment dollars going directly to work on your behalf, and less being spent on needless overhead expenses. 

If you have participated in other drilling funds, then you know firsthand how reasonable the terms of this drilling fund are. 

Stardust is able to keep things simple because Don Shepherd is capable of performing the bulk of the duties without a lot of extra support. Read this entire website carefully, and keep in mind that Don wrote every word. There is no way he could have done that if he wasn’t extremely competent.

The Galaxy Partners Drilling Fund No. 1 is a Texas Limited  Partnership. Stardust Energy, Inc. is the General Partner, and the investors are all Limited Partners. The basic terms of the Partnership  are as follows:

• Stardust receives a management fee of 12% of the fund’s initial capitalization. 
•  Stardust receives a 10% interest in each successful well after the wells pays out. 
• Stardust pays all overhead costs, business and travel expenses,  and management costs attributable to the fund, including any commissions, employee salaries and/or fees for professional consultants including any geologists geophysicists, engineers, landmen, and bookkeepers and accountants. 

I see many benefits in having a ready pool of happy investors. And you can be sure that Stardust will do its absolute best to ensure that everyone involved not only profits but has a problem-free and enjoyable experience as well. This is a fun and exciting business, and I intend to keep everyone informed as to the kind of deals we are participating in and how they are progressing as they move forward to  completions. Also, the investor pool can be tapped to take advantage of opportunities as they arise. For instance, if we see a deal that we like but for some reason don’t consider a good fit for our drilling fund, or if there is an interest remaining un-sold after taking the percentage we deem appropriate for the fund, then, where possible, we can take an option on the deal and offer it to our investors as a separate opportunity. With a business plan like this, I think we should all view this initial drilling fund as a catalyst to bring in all sorts of exciting opportunities. 

Thank you in advance for your consideration of this proposal. Please call or email me if you have any questions or want to talk further about any aspect presented here. And I would be happy to treat you to lunch or dinner for a more extensive discussion together. 

Very truly yours, 

Don K. Shepherd 

President, Stardust Energy, Inc.