Balanced Energy LLC of Southlake and its president, Kirk Johnson, are the targets of an emergency cease and desist order issued by the Texas State Securities Board, which said the company is soliciting unaccredited investors for its drilling projects and is failing to disclose the risks. The order, issued Monday, also says Balanced Energy is accepting payment through Bitcoin, a digital currency, without disclosing "the nature of the risks associated" with Bitcoin such as fluctuation in its value. The order says Johnson claims he has sold workings interests in wells to unaccredited investors and does not attempt to verify accreditation. An accredited investor is one with at least $200,000 in annual income and a net worth of $1 million not including home equity. Johnson and other Balanced Energy officials could not immediately be reached for comment.
According to the order, Balanced Energy offers to sell working interests in wells in Runnels County, south of Abilene. Interests in one, dubbed South Runway Prospect, are for 6.25 percent to 25 percent working interest and are offered for prices ranging from $30,038 to $120,152. Balanced Energy represents that a 6.25 percent interest in South Runway, "may generate annual net income from $18,476.33 to $92,759.06, depending on variations in the total barrels of oil per day" and other factors, the order says. The Securities Board said the interests are not registered and Balanced Energy's actions violate state securities laws.
-- Jim Fuquay