06 8 / 2014
Due to the fact that oil and gas investments are highly profitable, people assume that there is some sort of best kept secrets surrounding these but the truth is that there are no secrets to such investments. In order to have optimum returns from gas and oil investments, one should follow the never-ending process of evaluating the current investments as well as the prospective ones.
This should be done while making adjustments in order to keep up with the changing market dynamics and the fluctuation in terms of commodity prices. This is the key to making successful investments in gas and oil investment companies.
Cautions in Oil and Gas Investments
When you choose to invest oil and gas, you should be careful about the choices you make. While these are highly profitable investments, they do not offer astronomical returns such as 50% return in just a few years’ time! Thus, if you encounter an offer that sounds too good to be true then you should trust your instincts and steer clear of it.
Also, it helps to enter the scene of oil and gas investments with realistic expectations. If you want to gamble and take a chance with your investment then you can go for direct investment in drilling offers. These offer high and immediate tax deductions irrespective of whether the well drilled turns out to be dry or not. In case the drill hits gas or oil then you will not only gain tremendous returns but also enjoy tax deductions! However, this is a highly risky proposition and it should be considered only if you have money to spare for this kind of ‘gambling’.
How You Should Engage in Oil Gas Investing
Educating yourself about investment oil or gas is one of the best ways of minimizing the risks associated with such investments. In case you are contemplating about the idea of investing in a new drilling project then you should find out the operator’s success rate first to see if it is a good idea or not. To do this, you can check the number of wells wherein the operator has struck oil and also the company’s performance in comparison to the state and country averages.
It is foolish to go for an investment without finding out about the financial and production estimates first. A reputed and trustworthy operator would always list these details for potential investors’ perusal. In case the operator is unwilling to share these details then it is not worthwhile to invest in the project because it reeks of deception.
Another sure shot sign of a reputable operator is the investment in new technologies for improving the process of finding and extracting oil and gas. A good operator always invests in new technologies and research to boost the success rate of drilling productive wells.
Committing to a particular operator for oil and gas investment is a big decision, therefore it is advisable to exercise your due diligence and weigh the pros and cons properly before locking your funds into such investments!
05 8 / 2014
There will be lots of oil gas investing in 2014 and the years to come, states a report on the future of U.S. energy production from the nation’s Energy Information Administration (EIA). In fact, the EIA reports that domestic oil investments will grow by nearly a million barrels a day through 2017. American oil and gas companies are also describing the industry’s future as bright in while the price of gas at the fuel pump is up to nearly $4 a gallon nationwide, adds the EIA experts during recent congressional testimony in Washington, D.C.
Moreover, there is a view that because the new drive for America to be independent on forging oil and lost jobs that a new U.S.-focused oil and gas investment focus will spur huge growth in the industry.
Growth Drives Industry
Another aspect of oil investment companies is linked to how the future growth of invest oil is both positive and highly profitable for investors. For example, oil and gas production is expected to grow over the next few years “by leaps and bounds,” states a New York Stock Market white paper on continued growth in U.S. oil production.
In fact, the saying “invest oil” is so popular on the stock exchange floor today that many investors have it ingrained into their consciousness as one foolproof thing to invest in during these uncertain economic times.
Investment Oil Spotlighted
The EIA’s “Annual Energy Outlook 2014” offers great news for American oil and gas companies that are now breaking free from dependence on foreign oil and jobs thanks to new offshore oil drilling measures approved by the Obama Administration. The yearly EIA industry “outlook” report also spotlights U.S. oil and gas industry as “bullish” with lots of potential growth in the years ahead because Americans are still driving their motor vehicles in record numbers and using lots and lots of oil and gas.
Thus, the EIA outlook report predicts a positive future for American oil and gas production because consumption numbers are “still growing” each and every year. For example, the EIA reports that most of the growth in oil production is from new “homegrown” shale oil developments in Alaska, Texas and North Dakota.
Investing in American Oil and Gas
The EIA thinks now is a great time for investing in American oil and gas companies because business is great, and the future is very promising. At the same time, the EIA predicts that “U.S. oil import will fall” as the nation becomes more self-dependent on the country’s own wealth of oil and gas production that has reached an historical high thus far in 2014, state EIA experts testifying on Capitol Hill. EIA officials also told lawmakers in Washington that even with better fuel efficiency, the automobile industry will still produce vehicles in record numbers that use a lot of fuel.
Overall, the view that oil and gas production in the U.S. will continue to be a boom industry simply because Americans are still driving cars and other vehicles in record numbers.
05 8 / 2014
The oil and gas industry presents excellent investment opportunities. These energy sources are used in every corner of the world and remain main driver of economic growth. The success of any country’s economy depends on steady supply of oil and gas. These two resources are used in all types of industries. Oil gas investing must be a part of any investment portfolio. There are many reasons why investors should invest oil and gas.
The risk of losing money is less in this investment field because there is always strong demand for these energy resources. Developed countries keep using same amount of oil and gas as earlier while developing and extremely poor countries are going to consume more of these energy sources. It means there will be a strong demand for these resources for next many decades.
Another reason why oil and gas is a better investment option is that the supply level of these resources is not going to increase in near future. The supply is rather decreasing because old wells are drying, exploration of new wells remain super expensive, and many major oil producing regions in Middle East remain embroiled in conflicts thereby restricting the supply. Major oil producers also limit production to keep the prices on the higher side.
Tax Incentives for Invest Oil
Oil and gas are considered vital to the stability and success of a country’s economy. The industries related to this field can remain in operation only when there are sufficient funds in R&D, exploration and refining projects. The government understands this fact and so it offers tax incentives to investors for oil investing.
There are many direct and indirect tax incentives offered to oil and gas investors in many countries. These incentives mean there is better return on investment oil compared to other investment options.
Better Investment Protection
Investments in shares and stock of other companies are vulnerable to short-term market fluctuations. Those investment options are not for all types of investors. Only investors who have appetite for investment risks can invest in those options. On the other hand, the demand for oil and gas remains strong even when overall economic conditions deteriorate.
Invest Oil to Keep Investment Portfolio Diversified
A diversified investment portfolio is the first lesson given to any investor. It is important not to bet on a single investment option. A diversified investment portfolio helps reduce the risks of losing money quickly. Any investment portfolio must include oil and gas investments. There are various options in these fields. Investors can invest in oil exploration, commodities trading, and in shares and stocks of oil investment companies.
These are the main reasons why investors are advised to invest oil and gas sectors. These two sectors remain crucial to the success of all types of industries. The talk of using renewable sources of energy in place of fossil fuels remains unrealized because renewable energy options are not viable without government subsidies.
As more and more poor people in developing and poor countries move to higher levels of living standards they will consume more products and services. Manufacturing products and providing services on that scale will result in greater demands for oil and gas in future. These two energy sources will remain the most valuable commodities in the world for decades to come.