[Posted on July 11th, 2013 by Michael L. F. Slavin]
Oil is a natural resource found deep in the earth, and has been used to provide energy for thousands of years. Today, this source of power is still in demand, as it is used to run cars, trains, airplanes, and other industrial equipment. If there is ever a time to invest in oil wells, it is now. Conventional oil production in the United States is increasing in supply, which means increased revenues for many energy companies and newer technologies have lowered the risk significantly. Investing in oil wells at this time may prove to have many benefits.
Why Invest in Oil Wells
Oil has long term economic value. Long after regions known to have oil are depleted, deeper production methods are employed, which may open up reserve areas. New wells are being discovered almost daily. Even if the investor starts today, they may come across great profit margins in the future, as the price of oil steadily rises over time.
There are incredible federal tax oil benefits that come with owning oil interest. An investor may be able to deduct up to 80% or more of the investment on their tax return, and 15% of the gross income is tax free. Experienced investors continuously invest in many different projects, as it is always best to spread your risks into different wells. Also, it is another way to get a nice tax deduction every year.
Many Middle Eastern countries have profited greatly from having this particular resource in their country. In fact, many Organization of the Petroleum Exporting Countries (OPEC) members are from this region of the world. Now, the United States is emerging as a key oil supplier, which can prove to be beneficial for investors in the North American region.
How to Choose Oil Companies for Investing
There are many companies that one may find when looking for how to invest in oil. However, very few has been in business for as long as U.S. Emerald Energy. With over 21 years in business and an A+ rating from the BBB, they are one of the leaders in oil and gas direct participation programs. In addition, they use the latest technologies to help lower the risks of drilling, and they only drill developmental wells. Even the industry averages on these types of projects can be as high as an 80% success rate. It is also good to work with a company that only targets wells with multiple pay zones and proven undeveloped (PUD) reserves.