Eratz Investments, Inc. - Oil and Gas Exploration and Development - Dallas, TX

Due Diligence

In today's world of the global marketplace and instant access to information via the Internet and World Wide Web, one can find a lot of information about companies doing business today, but that information is not always current or up to date. Certain outdated information arising from circumstances beyond the control of Eratz Investments has been posted on the Internet that requires clarification. Eratz Investments wants potential clients to know that as a company they are committed to performing all due diligence required to be in compliance with current laws and regulations regarding offerings to private investors. Eratz Investments has been drilling oil and gas since 1989 and has a sound reputation, and our record of production speaks for itself.

On March 15, 2005, Eratz Investments was named in a Summary Order to Cease and Desist issued by the Pennsylvania Securities Commission in connection with a drilling program initiated by Eratz Investments. According to their Commission's press release, Eratz Investments contacted an individual resident within their state about an investment in one of its programs. The press release stated that resident claimed that he was not an accredited investor and did not have sufficient knowledge and experience to evaluate the merits and risks of the investment. The Pennsylvania order directed that, in the future, Eratz Investments comply with the registration provisions of the Pennsylvania Securities Commission.

On June 15, 2005, the Division of Securities in Wisconsin issued a Summary Order of Prohibition and Revocation against Eratz Investments, following allegations that Eratz Investments offered interests in a drilling prospect to a person in Wisconsin in February 2004. The Wisconsin Order prohibited Eratz Investments from making offers or sales unless the securities were registered with the Division of Securities.

These summary orders from the states of Pennsylvania and Wisconsin were in response to situations in which prospective investors were sent offering-related materials. The names of the investors were obtained from vendor-created marketing lists that provided the contact information of individuals who had invested in oil and gas ventures in the past. Unknown to Eratz Investments, the attorney handling both cases did not fully resolve the issues, and then died unexpectedly, and his widow disposed of the files and subsequent correspondence. The regulators closed the cases without our representation or notification.

In 1995, Eratz Investments sold gas wells in Kay County, Oklahoma to another bonded operator in Oklahoma. Years later the operator went out of business and abandoned the wells without plugging them as required by the Oklahoma Conservation Commission. Subsequently, in January 2008, the Corporation Commission of Oklahoma claimed to be unable to locate Eratz Investments regarding a proposed plugging liability and then ordered the Oklahoma State Fund to plug the wells. However, Eratz Investments has occupied the same offices and had the same published telephone numbers for twenty years. The matter has been referred to legal counsel for corrective action.

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