The New Stuff


4 Super Advantages of Oil and Gas Investing

Investing in oil and gas shares common characteristics with investing in various other types of alternative investments, the most obvious is real estate, which looks to provide a generous return through a combination of (1) current income and (2) appreciation upon sale.

However, there are some characteristics/advantages of oil and gas investments which differentiate it from real estate and other alternative investment. Listed below are a few.

  • Absence Of Leverage – Debt or leverage is not often used in oil and gas investing. While real estate investors are open to foreclosure risk when loans failure to pay or cannot be refinanced on maturity, the oil and gas investor simply bears a reduced ROE, and has no personal risk on recourse debt or so-called non-recourse carve-out guaranties.
  • Diversification – The benefits of diversification are notable primarily in royalty offerings, where risk can be spread through packages of royalties (1) across different fields, (2) counties and states, (3) across predominantly oil or predominantly gas producing properties, (4) across relatively mature and less developed properties and (5) across a broad range of qualified operators and distribution networks. The opportunities for diversification are less apparent in working interest offerings, although some sponsors are including (1) more than one opportunity in an offering, and (2) mixing existing production, (3) rework and drilling opportunities into the same package.
  • Transferability – There is a long history of fractionalized oil and gas interests. Direct participation royalty interests are generally freely transferable without the types of securities law concerns and other obstacles which make fractionalized real estate interests difficult to transfer. Working interests and interests in funds are less transferable.
  • Tax Benefits – Many oil and gas investment programs, especially working interest programs, include huge tax benefits. Be alert of programs that seem to push the envelope on tax benefits, and all the time review the offering with your own personal tax counselor before investing.

Recently Published


Best Money Making ideas for your Cheerleader fundraiser

Are you looking for ways to raise money for your cheerleading squad? ...


Why Travel Medical Insurance Is Becoming Important?

The statistics for international tourists is rising gradually since ...


We do need to care for money in the investment business

There will be a lot of articles which will not let you work with some ...


Benefits of Contacting Commercial Mortgage Broker in Toronto

Most of the time, the borrowers direct themselves towards any of the ...


Things to compare online before taking a personal loan.

With the help of a personal loan, you can achieve your financial ...


Going into the Silicon Valley art market

The well-off technologists of Silicon Valley understand something ...


Strategic HR Management and Planning

It is an integrated human resource management strategy and system ...


Data Science and Artificial Intelligence

Data Science It is known as the abstraction of related visions from ...


Coins247 Is A Trading Platforms That Lets You Win

In 2017 Bitcoin rocked the financial markets and made headlines ...