Why Are Nuanced Financial Minds Investing in Oil and Gas?

[Posted on July 3rd, 2013 by Michael L. F. Slavin]

With other investments experiencing extreme volatility or declining returns, investing in oil and gas well development is currently gaining in popularity among nuanced investors. Investments in oil and gas well production offer a combination of many of the factors that go into a good investment.

No Surprises

Responsible investment experts recommend placing money only with trusted entities and investing in financial products and services that are not complicated and easy to understand. Direct partnerships and investing in oil and gas couldn’t be more straightforward—investors know exactly where their money is going and, in most cases, can even visit the well that is being drilled using their funds. 

Easy Investing

It is nearly impossible, as well as being cost-prohibitive, for an individual investor to conduct research, acquire the necessary equipment, obtain land or leases and then perform the work required to drill an oil well. However, investing in an oil or gas well through a reputable company is one way that an investor can gain the benefits of taking part in the petroleum industry without having to do all the work. U.S. Emerald Energy makes it their business to find productive reserves and uses the funds supplied by investors to cover the costs of drilling and developing the wells. 

Income Potential

Oil and gas production is a unique means of investing that does not create a one-time return, but instead can be used to establish an income stream that pays monthly income for years to come. The process of drilling and completing an oil or gas well typically doesn’t take more than a few weeks. The investor will then begin receiving monthly checks based on the productivity of the well and the current price of oil and gas for as long as the well is productive. U.S. Emerald Energy makes every effort to drill wells that penetrate multiple productive zones to create a long-term stream of income for investors. 

Tax Benefits

The economy of the United States requires a constant source of fuel to grow, and although alternative fuel sources are being researched, fossil fuels such as gas and petroleum, are still heavily relied upon to generate sufficient electricity and to power vehicles. Domestic oil and gas production help cut American dependence on foreign oil sources that are often located in areas that are unfriendly to American interests. Due to the obvious benefits to the American economy of maintaining a reliable, steady supply of fuel, the U.S. government has structured the federal tax code to provide tax breaks to individuals that choose to invest in oil and gas wells. The costs of well development can be written off as a tax deduction for federal income tax purposes, even for unproductive wells, while 15 percent of the long-term income stream is also free from federal income taxation. 

Traditional investment methods, including stocks, bonds, mutual funds and precious metals have experienced extreme volatility in recent years. Fortunately, most economic trends and projections regarding oil and gas prices point to an ever-increasing demand for fuels derived from gas and oil. Even in slow economic times there is still demand for gasoline, fuel oil and natural gas because these products are used by millions of individual Americans and corporations. Partnering with U.S. Emerald Energy today is a great way to better prepare for your financial future while also taking advantage of the rising price of energy.

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