Wells owned by a company the government accused of defrauding 121 investors are being auctioned by a court-appointed receiver attempting to recover money.

A federal court has ordered the sale of a portfolio of oil and gas royalty and other interests consisting of about 9,000 producing properties and about 1,200 potential upside properties. Mineral leases are located in numerous Texas counties, along with 16 other states.

The sale stems from a Securities and Exchange Commission (SEC) case accusing Vendetta Royalty Partners Ltd . of securities fraud and running a Ponzi scheme involving purported investments in oil and gas projects. The SEC said the enterprise brought in nearly $34 million.

EnergyNet is handling the auction of the 258-well package in Crockett and Schleicher counties, Texas, in the Permian Basin. In the past 12 months, average 8/8ths production was 6,239 cubic feet per day and 39 barrels of oil per day. During the same period, average net income has been $8,556 per month.

The assets are operated by Approach Operating LLC . Properties will be sold through sealed-bid auctions on EnergyNet.com. Due diligence information is available from EnergyNet.com on a “per auction” basis as lots are activated on the website.

The auction starts Sept. 4 at 2 p.m. CDT and ends Sept. 11 at 2 p.m. CDT. For information, contact EnergyNet’s Chris Atherton at 832-654-6612.

 The Case

In December, the SEC accused Robert A. Helms and Janniece S. Kaelin , among others, of misleading investors about their experience in the oil and gas industry while pitching “supposed purchases of oil and gas royalty interests.”

The promised return: up to 300% to 500% on investments in five to seven years.

The SEC said Vendetta was an exercise in deceit. Helms and Kaelin have denied the accusations against them.

The government said nearly all of the money raised for oil and gas investments was used to make Ponzi payments and cover various personal and business expenses. About 10% of the investment money was used for oil and gas projects, the SEC contended.

“Helms and Kaelin pretended to be in the oil and gas business when they were really in the business of fattening their own wallets,” said David R. Woodcock , director of the SEC’s Fort Worth Regional Office. “They lied to investors about the use of offering proceeds, spent investor funds on personal expenses, and made Ponzi payments to give investors