Last Updated on December 7, 2020 by sltv
At SellLeads.tv, we actively seek leads for potential investors in private oil and gas investors opportunities. In today’s blog, we’ll lay out the requirements and advantages for investing in private oil and gas projects – our hope is that the information will stimulate you to identify friends and acquaintances that fit into the required profile. We will pay you top dollar for this kind of information. The types of investments we are discussing include:
- Oil wells
- Gas drilling
- Oil services
First of all, individual investors must be accredited – have at least $1 million in assets or earnings of $200,000 in each of the prior two years. Accredited investors can participate in private placements, which is important because many oil and gas opportunities are offered by private companies. Anyone can buy Exxon stock, but access to private investments is limited by Regulation D of the Securities and Exchange Commission.
Accredited investors may be attracted to oil and gas investments associated with proven reserves because of the following advantages offered by these types of investments:
- Lower Risk: The strategy behind many conservative investments in oil and gas is to exploit under-developed, under-financed or mismanaged leases. Private firms work with investors to identify leased oil and gas properties which are not providing their full return potential. By concentrating on underperforming properties, risk to the investor is minimized.
- Repayment: The vast majority of successful investments are fully repaid within two to four years. Relative short payback periods are another way that these investments lower risk to investors.
- Tax Advantages: There are unique tax advantages in the oil and gas industry that can be passed along to investors. These advantages relate to special tax breaks for depletion, intangible and tangible drilling costs and lease costs, among others. Also, as a passive investor, any net losses you experience are considered active income and can be netted against other forms of income – wages, interest, capital gains, etc.
- Cash Flow: A productive investment can render many years of normal cash flow to investors.
- Diversification: Returns on oil and gas investments are not highly correlated with stock market performance or interest rates, making this type of investment a good way to lower your overall portfolio risk through diversification.
Obviously, oil and gas investments in proven reserves are much different from “wildcatting” – investing in unproven areas, a highly speculative venture.
We invite you to sell us your lists of accredited investors who may be attracted to the unique advantages provided by oil and gas investing.