Tag Archives: Existing Wells

New Oil Wells

Some investors prefer the excitement of opening new oil wells. Others find that reworking existing wells give them more satisfaction. At Landmaster Partners, both options are possible. We work on new drilling projects, but we also find oil in wells that have already been dug. If an oil well is still producing, we keep it open. There are a few different ways we can extract oil from established wells.

The different ways new oil is harvested determines the financial risk for each investment. When we set up a site to drill a fresh well, there is a high risk that the project can become a total loss. The reason the risk is so high is we can drill right into a dry hole without finding a drop of crude. If we don’t take the risk, we would not find the oil we have found by drilling exploration wells in the past. When the risk is high, investment opportunities produce more profits. This is mainly why shareholders will invest in these types of wells. The return of investment is higher where the risk is greater.

There are times when we will create a development well. Wells dug next to other producing wells is called step-out wells. Other development wells are drilled between existing wells. The reason we go after the spaces between wells is that oil can be pulled out of the oil formation the original drill doesn’t reach. There is some risk of a total loss when we invest in development wells. But they are worth drilling because they do produce some oil.

Revenue from oil and gas drilling has been fruitful by reentering old wells. With only some risk of loss involved, investment opportunities do turn profits. Because you can see the oil that is in existing wells, this type of investment can potentially yield quite the return over time. Because the well has already been drilled, the cost for running an established well is less than drilling new oil wells. As with all oil and gas investing, there is still some risk involved with investing in old wells. But if you want to see where your money is going before you invest, choosing to reenter established wells is the way to go.

We also find profits in reworking existing wells and in purchasing production that is already taking place. While these options have less risk involved, there is still always a chance we could dip for oil and not find it again. These types of investments produce profits differently between projects. Some wells still have oil formations below them. Sometimes it makes sense to buy into wells that have already been set up. Over time, lower risk investments can produce a steady profit.

It doesn’t matter if you’re a risk-taker, or just want a relatively stable commodity to invest in. When you work with Landmaster Partners, you’ll find options for your comfort level. If you still have questions after reading this post, call our Texas office at 325-704-2530 or our Florida office at 863-452-2892 for more information. We’ll gladly discuss your options for investments in new oil wells and established wells.