Direct Investing in Oil & Gas

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Saxo Bank released it’s Outrageous Predictions for 2013, a must read.
Top analysts look at many sectors and topics, providing areas to be on the watch. Could Crude hit USD $50? How will that impact investors of oil producing properties? Could it happen? Yes, it could. If it does, there will be even more defaults of leases and notes to banks, providing many more orphan wells in Texas than ever before. Download this doc, it covers many sectors, including Oil! Download: Outrageous Predictions 2013 by Saxo Bank

Global Deficit Between Oil Consumption and Production Remains the Norm.  From study of World Energy reports of Oil Production and Demand, we are running in daily deficit.  As much as a 500,000 barrels a day deficit. I was blown away when I saw this in World Energy reports.

If we have massive ramp ups in Oil Production, we must produce overages for years in order to catchup. We are in a cumulative deficit.

Speculators drive prices, based somewhat on supply and demand. If anyone gets a grip on actual daily production and demand (usage), prices would skyrocket for a long time to come.

NEW YORK (CNNMoney) — All the attention may be on a loss of oil from Iran these days, but production outages in a variety of spots worldwide is causing about one million barrels of oil a day to sit on the sidelines, helping push oil and gas prices to near record highs.

Download this Excel Report and compare the
Total Production tab and Total Consumption Tab…
Example: 2010
This is in Thousands of Barrels a day, so here is the total…
82,094,645.31 Production per DAY
87,382,146.84 Consumption per DAY
-5,287,501.53 Deficit per DAY
Download the report

Then checkout the numbers in the International Energy Agency’s Report.
Simple math shows ongoing deficit of Production to Consumption. 

You Should Consider Direct Investment in Gas and Oil
But, first… Why & Why Not?

First of all, join us on twitter for latest industry feeds, as well as releases of opportunities in the Oil & Gas Industry.

Why Direct Investment in Oil & Gas? The Oil & Gas Industry provides many opportunities for knowledgeable investors.  Most people are familiar with the industry’s Stocks and ETF’s.  Few brokers would ever tell you the Industry Secret.  That you can actually invest Directly in Oil & Gas.  Why should they?  It reduces their commission, as well as the book of business for their firm.  An elite group of investors have access to this secret and the tremendous advantages that await.

Some of the advantages of Direct Investment in Gas & Oil:

  • Strong returns
    Typically, investors see 100% Repayment of investment in 2-5 years.  That means a potential 20% to 50% annual return.
  • Years of potential cash flow
    Most wells can provide returns through 10-30 years of production.
  • Diversification
    Investors know the value of diversification.  Placing investments in different industries or instruments isolates volatility.
  • Less fluctuation by markets
    The stock market has a lesser effect on Direct Investments in Oil & Gas.
  • Reduced risk
    Risk can be minimized by qualifying improperly managed, under developed or under financed projects and leases.
  • Tax advantages
    Each participating partner of an Oil & Gas property may benefit from the tax deductions including drilling, operating costs, depletion and depreciation.

With these tremendous advantages for investing in Oil & Gas, why would anyone NOT directly invest in Oil & Gas?

Often, an Oil & Gas project requires considerable capitalization.  With opportunities from $20,000 to over $500,000,000USD, investors would participate as a LLP (Limited Liability Partnership), whereby they share the risk and reward, based on their relative ownership.  These LLP’s fill quickly, by industry insiders.  So, an investor’s liquidity could prevent participation, as well as not being at the right place, at the right time.

There are more reasons why an investor should not directly invest in Oil & Gas.

Let’s explore those reasons…
Why NOT Direct Investment in Oil & Gas?

The greatest reason to not directly invest in Oil & Gas is lack of Education.  Not parochial or college education, but that of personal finances, investment strategies, risks and nuances of industry or market sector.  A well educated investor will consider his/her personal financial situation, financial goals and liquidity.  An investment opportunity is then weighed by it’s risk and return, through careful examination of the investment needs, use of funds, source of revenue, liabilities and industry influencing factors.

Reasons to avoid Direct Investment in Gas & Oil:

  • If you can not afford to lose any, or all of your money.
  • If you want to get rich quick.
  • If you do not have patience.
  • If you want a fixed return.
  • If you want fixed dividends.
  • If you require liquidity.
  • If you do not understand long term investing.
  • If you do not understand business development and operational costs.
  • If you do not understand risk and reward.
  • If you do not want to learn about the industry.

The overwhelming potential is incredible.  Individuals looking for long term investment opportunities, with great ROI will appreciate Direct Investment opportunities in Oil & Gas.  The only hurdle is knowledge of this tightly held secret and where to find viable opportunities.

Scott H Leonard