During the current recessionary economy many investors have been looking for investments that make economic sense and are not suffering from low returns. Can an Oil and Gas direct investment fill the requirements? The fact that an Oil or Gas well has an expected life span of 50 years plus, has many tax advantages including Depreciation of most of the investment (costs of exploration and drilling) and other tax incentives is more than most investment choices. The returns can be 30% or better, of course nothing is guaranteed.
Will Gas and Oil demand lower, and the price (therefore investment return) follow demand? The prevailing opinion is that demand will go down in the U.S., but much of the rest of the world is just beginning a steep upward demand. And as far as the demand in the U.S. going down, it won’t be fast or that much for many years. Green technologies are just in their infancy, and will take time to sort out the winners. Natural Gas is one of these new fuels that burns cleaner and is already in use in public transportation and industry. So the demand for these wells will continue into the foreseeable future.
Qualified investors can directly invest in Oil and Gas production through independent Oil and Gas companies. Some of these companies handle the physical aspects, such as exploration, planning, well preparation, drilling, and well completion. An example of this type of company is Gulftex Operating Inc. in Dallas Texas, Tim Burroughs CEO.
To educate yourself on the physical processes from exploration to production you can visit their site (see link below) to view their Layman’s Guide to Oil and Gas Production. A production company will have relationships with investment companies who handle this type of investment.
Gulftex Operating
http://www.gulftexoperatinginc.comSister company TBX resources
http://www.tbxresources.com