What You Need to Know Before You Invest in Oil Wells

[Posted on August 22nd, 2013 by Michael L. F. Slavin]

Oil and gas well investing is a subject that may not be familiar to everyone. However, for an investor looking for an investment vehicle that is easy to understand and that can generate a partially tax-protected stream of dividends, learning to invest in oil wells deserves a closer look and strong consideration. U.S. Emerald Energy, an American company with over 20 years’ experience in oil and gas production, offers a unique opportunity to individual investors looking for a tax-sheltered means of investing.  

Facts about Direct Oil and Gas Investing

Direct investment in oil and gas production is accomplished through a joint venture partnership between an oil and gas company, such as U.S. Emerald Energy, and one or more individual investors. The oil and gas company provides the labor and supplies, and the investors provide the financial backing required to drill and complete an oil or gas well. In exchange for their investment, those who invest in oil wells, specifically productive wells, receive a regular dividend check for as long as the well remains productive.  

The Benefits of Investing In Oil and Gas Production

Investing in oil and gas wells benefits the investor and creates other positive effects as well. Not only do investors have the opportunity to place their money in a tangible investment that furthers American energy independence and creates jobs for American workers, the initial investment and a portion of the dividends receive a tax benefit.

The United States government created these tax incentives due to the critical importance of continued American energy production. The tax code allows the funds invested by individuals in oil and gas production to be taken as a deduction on the investor’s federal tax return. Depending upon the nature of the costs incurred, most of the deduction is eligible to be taken immediately, while the remaining amount is to be depreciated equally over seven years. In addition, a percentage of the income stream generated by the well is also completely free from taxation. Some investments receive protection from taxation in the form of lower rates, but the tax breaks created by an investment in an oil or gas well are hard to beat.  

Why Choose U.S. Emerald Energy?

U.S. Emerald Energy strives to take a safe, yet balanced, approach to oil and gas exploration and drilling. Unlike many energy companies that drill at random sites in hopes of making a big score, U.S. Emerald Energy carefully researches areas before drilling using the most up-to-date exploration methods, including seismic testing and 3D seismic modeling, in addition to only drilling in areas with proven reserves. When researching a new well, U.S. Emerald Energy also prefers targeting multiple productive formations in order to create a long-lasting stream of income and decrease risk. 

Investing in oil and gas wells offers a range of unique benefits to the investor. If you haven’t considered investing in oil and gas production and would like more information, visit U.S. Emerald Energy to find out how to incorporate this unique investment vehicle in your portfolio.

U.S. Emerald Energy was founded in 1992 by Michael L. F. Slavin, a West Point Graduate from the class of 1975.  After serving 10 years as an Army Infantry and Aviation Officer, Mr. Slavin eventually found his way into the oil and gas business. For more information, contact U.S. Emerald Energy today at 1-800-783-9059.

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