Types of Oil & Gas Investments in South Texas

Insider insights into the South Texas Oil Boom

There are many types of oil & gas investments in South Texas and there is a great deal of work that goes in to oil and gas production and worthwhile investments can be placed within every step. Generally, there are four types of oil and gas investments.

The first is exploration. It is the beginning stage of oil and gas, with companies or projects buying or leasing land to invest in drilling. It is a daring prospect, because if oil is struck the investment can increase tenfold. Unfortunately, all can be lost if oil is not discovered. This type of oil and gas investment is usually reserved for those who enjoy speculative projects and high risk endeavors.

The second form is developing. Developers take advantage of preexisting reserves in the hopes of unlocking further value. They are slightly less speculative than exploration, but again, there is risk in that the valued resources may not be found.

The third form is income, which tends to be the most stable form of oil and gas investments. The goal is to acquire plots of land through lease or purchase that are located over proven oil and gas reserves. An investor can then be involved in the drilling and extraction of oil and gas, with the only concern that these resources will diminish faster than one would hope.

The fourth form is in services and support offered to the oil and gas industry. These are the companies on the periphery of oil and gas drilling, engaging in transportation, shipping and logistics companies, construction and rigging companies, drilling and refining hardware, and much more. The benefit in this form is that there is less reliance on the fuel prices to earn a profit. As long as demand is maintained, there will be equipment and resources necessary for oil and gas production.