Tax benefits of oil and gas can dramatically reduce tax liability. Also useful as a tool to create wealth, one would miss one of the most solid investment opportunities to look past oil and gas investing. There are many benefits when you invest in oil and gas. Profits from oil and gas come from many diverse areas. The more you know about your investment, the better your chances are to increase financially.
Several types of investing programs are available with Landmaster Partners. The range on such packages covers low to high risk investments. When a package is put together for our clients, we recommend diversifying your dollars over each type investment to create the most earning potential. Having a balanced oil and gas investing portfolio ensures gains, even when higher risk investments incur losses. Since every continent on the earth consumes these commodities, earning potential increases exponentially over time. Even with the inception of alternative fuels, it is unlikely that gas and oil will ever be completely replaced. This means revenue from oil and gas will be available for a good, long time. The following investment types are available.
Drilling new exploration wells presents a relatively high risk of total loss.
These are also referred to as “wildcats”. These are wells that are drilled in unproven areas and have a high degree of risk as many result in being a dry hole.
Drilling development wells present some risk of total loss.
These wells are drilled in close proximity to an existing producing well. A “step-out” well is one where the operator is attempting to determine which direction the oil formation is going. There are also “in-field” wells that are drilled between two or more oil wells. These wells usually do not offer a large rate of return and still have some risks for loss.
Re-entering old wells presents risk of some loss. As with re-working existing wells, this type of investment could yield a substantial return because you see what is in the well prior to investing your cash, and you don’t pay to drill it. There are still several risks with re-entering old wells.
Re-working existing wells presents risk of some loss.
The returns and risks of this particular investment varies by project. A successful re-working of wells in other pay zones largely depends on the accuracy of well records and condition of the well and equipment. If information is correct and equipment is in working order, this investment could yield a substantial return fairly quickly. There are two reasons why this is the case:
One: you see what each well holds before you invest cash.
Two: The investment required to work the well is considerably lower, because it has previously been drilled. You benefit from the production in a newly-formed pay zone. Some wells produce for over 50 years, which means your investment pays out for decades to come.
This type of investment carries the lowest risk, highest initial investment, and the slowest return. Investors buy into producing wells. Consult with a certified petroleum engineer on this type of investment before buying, and confirm the remaining life of the production. These wells also require occasional maintenance and repairs.