Examining if You Have a Sound Oil Well Investment

[Posted on September 5th, 2013 by Michael L. F. Slavin]

One method of investing that is new to many individuals is oil and gas direct participation. Investing in oil and gas wells with a reputable company, such as U.S. Emerald Energy, is one way that an investor can create a steady stream of income, while also benefitting from special considerations in the U.S. tax code and helping to foster America’s energy independence. Although no oil well investment of any type is guaranteed to produce a return, U.S. Emerald Energy takes every step possible to be good stewards of invested funds and to ensure that every well drilled is productive.  

Advanced Exploration

As fossil fuels have become easier to locate and extract, the methods used to find reserves have improved accordingly. The newest exploration methods utilized by experts include seismic testing and 3D modeling. Seismic waves are similar to the energy released by an earthquake. Seismic testing is performed by creating seismic waves using dynamite or a seismic wave generator. As the waves pass through layers of rock, groundwater, subsurface petroleum, gas deposits and other underground materials, they react differently. Scientific equipment records the seismic waves at different points around a site, and the information gathered is then used to prepare a 3D map of the subsurface. When considering an oil well investment it is important to keep in mind that U.S. Emerald Energy uses both cutting-edge methods to pinpoint the best possible areas to drill.  

Responsible Drilling

Even if petroleum reserves are located and mapped, not all deposits can be accessed and developed. In some cases, the amount of petroleum present does not justify the expense, time and effort to drill a well. In other areas, the oil or gas reserve may be large but located in an area that cannot be readily accessed due to logistical problems. U.S. Emerald Energy avoids these problematic areas, as well as unproven, unexplored areas and only drills in areas with proven, undeveloped (PUD) reserves. PUD reserves represent the greatest likelihood of encountering a productive formation, and, by selecting only these areas for drilling, U.S. Emerald Energy greatly increases the chances of a successful well.  

Sustainable Production

It is important to many investors that their funds go to support projects that are environmentally responsible. At this point in time America’s need for fuel to heat homes, operate vehicles and generate electricity simply cannot be met with alternative energy sources, making fossil fuels necessary to sustain the standard of living that Americans enjoy. Using domestic sources of fossil fuels eliminates the need to transport crude oil and refined petroleum products over long distances and ensures that drilling and production occur under the stringent environmental regulations that exist in this country. U.S. Emerald Energy’s advanced exploration techniques also reduce wasted effort, while responsible drilling and completion methods help reduce the impact of a well on the local environment.  

Even when a well is not productive, the losses incurred are subject to tax breaks and may be taken as a deduction on the investor’s federal tax return. The tax breaks, along with all of the factors discussed above, combine to make oil and gas well investing beneficial options for investors.

Michael L. F. Slavin is the President and Owner of U.S. Emerald Energy, and has been in the oil and gas business for over 21 years. Contact us today at 1-800-783-9059.

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