Strike It Rich In Oil

After winning a U.S. government lottery for oil and gas rights to a parcel of America’s untapped mineral lands for the third time in less than 18 months, 42-year-old Philip Donaldson of Grand Blanc, Mich., is convinced that he is riding a hot streak. “Lady Luck could make me a millionaire by the time I’m fifty at this rate,” says Donaldson, a General Motors factory worker.

Each month, the Interior Department’s Bureau Of Land Management offers lease rights to government oil and gas properties through its legal lottery. Any U.S. citizen, age 21 or older, is eligible to file entries, and the winners gain exclusive oil and gas rights “control” to those properties.

In the fall of 1975, Donaldson filed his first entry through Energy Group Of America, a firm based in New York City, and struck it rich by winning rights to a parcel of land in New Mexico. Without any prior knowledge of the oil and gas industry, he quickly sold his rights to Tenneco Gas for $9900, plus a 3 percent overriding royalty on any gas and oil discovered on his property. A lucky strike on that land could make him an instant millionaire.

Major oil and gas producers, like Exxon, Mobil, Tenneco, and Shell, usually vie for these lease rights for purposes of exploration and production. When a strike is made on Donaldson’s parcel, he will receive a royalty payment for each barrel of the black gold gushing out of the ground; there is no investment on his part once he sells to an oil or gas company.

In the spring of 1976, Donaldson struck it rich again by winning lease rights a second time-to a property in Wyoming. On this occasion, he sold his rights to Chorney Oil for $24,000 plus a 3 percent royalty. Even if oil or gas is never discovered on these properties, Donaldson is already $34,000 richer. If discovery is made, he can probably retire to a life of luxury.

Early this summer, Donaldson made history by winning his third parcel-this time in Utah. He competed with less than two dozen entrants. With just a little more luck, Donaldson will realize his millionaire-status ambition.

There is no secret that we are in the throes of an energy crisis. With a dwindling supply of oil-rich lands available, producers are expected to increase their exploration activities, making these land parcels more valuable than ever.

Many other Americans have won “rights” through these government lotteries. More than a few have become millionaires after rich deposits were discovered on their parcels. Yet although the lotteries have been conducted since 1960, the program was relatively unknown until recently, when some leading newspapers and magazines- The Wall Street Journal, Barron’s, Fortune. Money, and others- began to publicize them. Even now, the number of monthly entries is relatively sparse; the chances of winning excellent.

Consider the odds. A parcel considered to have good potential by the energy-producing companies can have from 400 to more than 2000 entries, while one with limited immediate potential generally has less than 100. Compare this with state lotteries, where the odds of winning a substantial payoff can average between 1 in 25,000 in New Hampshire, to more than several million in New York.

Hot Line



Each month, Energy Group Of America publishes a “Hot Line” for its subscribers. This lists parcels expected to be offered the following month by the government. Included in the Hot Line” are data about location, acreage, and the price paid by Energy Group itself when it buys the lease. The only listings are those that the group considers to be in demand and that it would like to buy from winners. A special report and booklet about the lottery, along with a sample 3-month subscription to “Hot Line” and a supply of entry cards are available.

Energy Group Of America. 3308-CD. Empire State Building, New York, NY. 10001. Call (800) 621-5809. Ask for Operator #16.