Wise Gas and Oil Investing

by | Jun 26, 2014 | Why Invest in Oil

Wise Gas and Oil Investing

Insider insights into the South Texas Oil Boom

Any serious investor who is considering the possibility of gas and oil investing should perform the necessary due diligence to protect himself and mitigate risk. This due diligence begins by recognizing the difference between investing with brokers versus investing with owner-operators.

When considering gas and oil investing and becoming a joint owner in a well, it makes sense to work as closely as possible with the owner-operator. Working directly with oil and gas well owner-operators puts you in direct contact with the people on the ground; the people who know the land and how to tease profit out of it. By choosing to work with owner operators who have a demonstrated history of successfully establishing oil and gas wells that produce, you minimize your risk and maximize your opportunity to learn more about the oil and gas industry.

In addition to performing due diligence in choosing an owner-operator with whom to invest, you should put the same effort into understanding any potential drill site. Review geologic surveys, review any testing that has been done, and make sure you understand the informed estimates about potential oil or gas well production. Gas and oil investing offers accredited investors unique advantages, including tax incentives that are available regardless of the well’s ability to produce.