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A Dry Hole is a term used to describe a non-producing oil or gas well. When an exploratory oil and gas program drills into the earth hoping to discover a new oil or gas reserve, failing to find oil and gas results in a dry hole.
Wells that are drilled as part of a wild catting or exploratory operation failing to discover oil or gas end in a dry hole. In this scenario investors will be subject to significant losses. An oil or gas program that runs out of oil or gas becomes a dry hole. During oil and gas exploratory programs also known as wildcatting many of the wells don’t ever produce and the program is said to have drilled a dry hole. Wild catting or exploratory operations are the most risky oil and gas DPP. You will most likely see several questions on your exam relating to oil and gas DPPs. Be sure you know the risks and objectives for each type. Pass your exam or your money back with our GreenLight pass guarantee.
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The Securities Institute of America, Inc.