It's not illegal for an American company to drill in Venezuela. But why would a small Oklahoma firm want to do business in Venezuela, when many companies think the best option is to get out?
For weeks the company declined to answer any questions. When a CNBC investigative team showed up in Oklahoma and started knocking on the doors of Horizontal Well Drillers' executives and former executives, the company finally agreed to answer questions via email.
In that statement, the company said it has a deal to drill nearly 200 wells in the Carabobo area of the Orinoco heavy oil belt, a region that is home to some of the world's largest oil reserves.
Horizontal Well Drillers noted, too, that it has a Master Services Agreement in place with oil services company Halliburton to provide drilling tools and equipment.
Texas-based Halliburton confirmed its participation in this agreement.
Horizontal Well Drillers says it is "uniquely qualified" to take on this project because its drills are "well suited" for the geologic formations found in Venezuela's Orinoco oil belt. The company credits its rigs' large capacity and small footprint for allowing it to drill in difficult-to-reach areas.
Pedro Burelli, a former member of PDVSA's board who opposes the current Venezuelan government, isn't buying it. He said he has never seen a deal like this awarded to a company like Horizontal Well Drilllers.
"I'm not questioning their ability to do small jobs. I'm just questioning their credentials to do large jobs," Burelli said. "I'm questioning their financial whereabouts to guarantee the work that they're doing. And definitely, I'm questioning their managerial talent to operate in an environment like Venezuela."
An environment, he says, where equipment theft is rampant and corruption is prolific.
In its statement to CNBC, Horizontal Well Drillers said the company takes compliance with U.S. sanctions and the Foreign Corrupt Practices Act very seriously.
While the company may be physically equipped to take on this deal, its financial backing raises more questions. According to a press release from PDVSA, the deal requires the companies to provide the upfront investment capital for the drilling.
Paperwork filed with the Oklahoma County clerk shows the company has been financed, at least in part, by Callidus Capital, a Canadian firm that provides "funding solutions to companies that cannot access traditional lending sources."
Court filings show Callidus is suing a former employee because that employee "allowed Horizontal to create a letter on forged Callidus letterhead, purporting to make financial commitments on behalf of Callidus" to provide to Venezuelan government officials comfort that Horizontal would be able to meet its financial commitments.
Horizontal Well Drillers told CNBC it did not create a fake letter and that it is not a party to the Canadian litigation. Callidus and the attorney for the former employee, who is disputing the allegations, declined to comment on the litigation.
As a private company, Horizontal Well Drillers declined to comment further on its finances. Callidus declined to clarify whether or not it is still providing capital to the Oklahoma company.
Horizontal Well Drillers' executives did explain why they attended the lavish signing ceremony in Caracas: The company said it was required by the Venezuelan government.
Burelli said he's not surprised. He thinks Maduro used the two executives as props.