Danville oil, gas company facing new investigation

March 04, 2004

Target Oil & Gas Corp. of Danville is being investigated by state officials after receiving fresh complaints from investors, the Lexington Herald-Leader reported today in a story by business writer Jim Jordan.

The investigation will center on whether the company is selling unregistered securities to investors in its Kentucky and Tennessee drilling operations, Kyle Trimble, enforcement manager for the Kentucky Division of Securities, told the newspaper.

Target is exempt from federal securities registration requirements, Trimble said, but it might not be complying with state law.

Investigators also want to know how Target is using the money from its investors, he said.

One of the complaining investors, Ronald Bateman of Oklahoma City, said he gave Target about $60,000 from 2000 to 2002 for interests in wells the company was drilling.

Except for a $1,200 return on one well, the result was dry holes and wells that never went into production for various reasons, Bateman said yesterday.


When he asked questions, Bateman said that Target "just seemed to play me around until we went past the statute of limitations" for legal action on most of his claims.

Bateman has retained lawyers in Oklahoma City to review his options.

Target President Michael Smith did not return calls to his office from The Herald-Leader seeking his response to the comments by Trimble and Bateman. The Advocate-Messenger got an answering machine at the office number this morning.

Target agreed to change some of its practices after a similar investigation in 2002. Trimble told the Lexington newspaper the case has been reopened based on complaints from investors.

Bateman said he owned just one-sixty-fourth of one well that paid off. He participated in 16 of Target's wells.

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