Risk Disclosure
IMPORTANT: PLEASE READ ALL RISK FACTORS CAREFULLY
An investment in Trilateral Horizontal Program, LP involves substantial risks. YOU COULD LOSE YOUR ENTIRE INVESTMENT. The following risk factors should be carefully considered before making any investment decision.
Primary Investment Risks
Total Loss of Investment
You may lose 100% of your investment. Oil and gas exploration is inherently risky, and there is no guarantee that the Partnership will produce oil or gas in commercial quantities.
No Operating History
The Partnership and Managing Partner are newly formed entities with no operating history or track record. You cannot rely on past performance to predict future results.
Speculative Nature
This is a highly speculative investment suitable only for sophisticated investors who can afford to lose their entire investment.
Oil & Gas Industry Risks
Drilling Risks
- • Dry Holes: Wells may not encounter oil or gas
- • Mechanical Problems: Equipment failures can cause delays or abandonment
- • Geological Surprises: Unexpected subsurface conditions
- • Cost Overruns: While mitigated by turnkey contract, some risks remain
Production Risks
- • Declining Production: Oil and gas wells typically experience declining production over time
- • Reservoir Performance: Actual reservoir characteristics may differ from estimates
- • Equipment Failures: Production equipment may malfunction or require replacement
Commodity Price Volatility
- • Oil Prices: Subject to dramatic fluctuations due to market conditions
- • Natural Gas Prices: Highly volatile and cyclical
- • Price Forecasting: Impossible to predict future commodity prices accurately
Financial and Market Risks
Liquidity Risk
- • No Public Market: No established market for resale of partnership interests
- • Transfer Restrictions: Significant limitations on ability to sell or transfer interests
- • Indefinite Holding Period: You may be required to hold investment until partnership termination
Capital Requirements
- • Completion Call: Additional $20,000 per unit may be required for well completion
- • Default Penalties: Severe penalties for failure to meet capital calls (300% penalty)
Regulatory and Environmental Risks
Government Regulation
- • Federal Regulations: Extensive federal oversight of oil and gas operations
- • State and Local Rules: Varying regulations across jurisdictions
- • Environmental Laws: Strict environmental compliance requirements
- • Regulatory Changes: Future regulatory changes may adversely affect operations
Environmental Liabilities
- • Cleanup Costs: Potential liability for environmental contamination
- • Regulatory Fines: Penalties for environmental violations
- • Climate Change: Increasing focus on carbon emissions and climate impact
Partnership and Management Risks
Dependence on Managing Partner
- • Limited Oversight: Investor Partners have limited ability to influence management
Conflicts of Interest
- • Multiple Interests: Managing Partner may pursue other business opportunities
- • Related Party Transactions: Turnkey contract with affiliated entity
- • Competing Investments: Managing Partner may sponsor competing partnerships
General Partner Liability
If you elect General Partner status:
- • Unlimited Liability: Personally liable for all partnership obligations
- • Joint and Several: Could be liable for other partners' shares of obligations
Important Reminders
- • Consult Professionals: Discuss these risks with your attorney, accountant, and financial advisor
- • Suitability: Ensure this investment is suitable for your financial situation
- • Complete Information: Review the complete Private Placement Memorandum for additional risk factors
By investing, you acknowledge that you have read, understood, and accept these risks and that you can afford to lose your entire investment.
Last Updated: 09/25/2025