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There is an array of programs for those seeking to place investments. Tax benefits of oil and gas are just a bonus when investing in oil and gas. Investment risks will range between higher risk ventures to moderate and low risk ventures. With $100.00+ oil prices, our strategy is to invest in low to moderate risk ventures that can produce high returns. By diversifying your portfolio, you reap the overall increase. Our goal is to help all our clients make confident decisions.
The various types of O&G programs are shown below. Highlighted are the types of programs that Landmaster owns and operates.
Drilling new exploration wells. High risk of total loss.
These are also referred to as “wildcats”. These are wells that are dilled in unproven areas and have a high degree of risk as many result in being a dry hole.
Drilling development wells. Some risk of total loss.
These are wells that are drilled in the close proximity of an existing producing well. A “step-out well is one where the operator is attempting to determine which direction the oil formation is going in. There are also “infield” wells that are drilled in between two or more oil wells. These usually do not offer a large rate of return and still have risks.
Reentering old wells. Risk of some loss. As with reworking existing wells, this type investment could yield a substantially large return because you get to see what is in the well prior to investing cash into it and you are not paying for drilling it. There are still several risks with reentering old wells.
Reworking existing wells. Risk of some loss.
The returns and risks of this type investment vary from project to project. A successful recompletion of the well into another pay zone, whether deeper or shallower, largely depends on the accuracy of well records and condition of the well and equipment. However, if all the information is correct and the equipment is in working condition, then this investment could yield a substantially large return fairly quickly. Why? Two reasons: First, you get to see what the well holds prior to investing cash into it; and second, someone else paid to drill the well and you are not investing near the cost of a new well to enjoy the production from a newly completed pay zone. And it only takes 1 good pay zone to make a great profit. Some wells produce for more than 50 years!
Purchasing existing production. Very low risk of any loss.
This type of investment carries the lowest risk, highest initial investment, and the slowest return. This is where an investor is buying into oil and gas wells that are already producing. Consult with a certified petroleum engineer on this type of investment before buying an interest in it to confirm the remaining life of the production. These wells may also require maintenance and occasional repairs.
A combination of purchasing existing production with additional wells that need reworking is one of the best types of programs an investor can get involved in.
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