Archives: September 2005
Mon Sep 26, 2005
Investing In Oil & Natural Gas for Great Tax Benefits'
Investing in oil and gas at this time of the year is especially important for direct participation, working interest ownership oil & gas investors, not because of high pricing in the market place which all of us know about...but because the wonderful first year Intangible Drilling Cost (IDC) write-offs are so good...
Private oil and gas investors can get up to 86% first year tax deductions on funds invested and where some oil & natural gas development work begins this year...even if drilling the new well, or wells doesn't take place, or begin until March 31, 2006. (Check with your tax preparer, or CPA to be sure, but these are the rules as I understand them today.)
Reducing your gross taxable income is pretty important for most of us, before your federal marginal tax rate, and state taxes are calculated...but is especially so for the sophisticated, accredited, and qualified investor, who wants to take advantage of the legitimate tax code benefits, that have been retained since the Glass Steagel Act of 1986, the tax reform act of 1987, and all legislation that I know of right now...since these changes impacted on just about everything except oil & gas...you don't have to take your tax write-offs, but it seems silly not too, particularly when investors are helping the country to find more oil & gas, and certainly have the right to receive some tax benefits while taking some risk associated with drilling for oil and gas...
Let me know by email, and by sending your complete contact street address so I can get you some information about the great tax write-offs you can get while making some conservative, and prudent investments in oil & gas...
It's busy right now in the oil & gas business...as you can well imagine...but the best of the best, or the oil & gas development pro's are steadily booking reserves, and making investors money...and after 24 years in the business I'm pretty sure I know who the good ones are in our industry...
I can't help you properly without your contact information, and we will immediately make our staff available to those of you who supply your address information...bacause we need to know which state your're located so we don't break any securities laws... Email us at: americanenergy@gmail.com or call our office at: 408 975 0800. I'd like to help you with your tax problem, and target some oil & gas investments you will be impressed about, and enjoy learning about...Dennis
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Fri Sep 09, 2005
'Investing In New Oil & Natural Gas Well Ownership Versus Buying Royalties'
Investing in new oil & natural gas prospect wells versus investing in oil & gas royalties has several attractively unique, and distinctively distinct benefits...when compared to investing in oil & gas royalty programs...
First, when you acquire direct participation, working interest ownership in new oil & natural gas prospects, you are doing what the 'big boys' or major oil companies, and successful independents do...which is on a 'heads-up basis'...or at cost...searching for, and usually a majority of the time, finding new, and pristine reserves of oil & gas...and what this allows you to do is participate in the 'initial production', or 'peak production', or what is also called the 'flush' production of any new oil & natural gas well...this is important because it helps you get a faster recovery of your invested capital, and with successful wells, possibly several multiples on your money, or a high return of investment (ROI), in a few years...rather than relying on a very long pay-out, of 10 years or more... for your hoped for...return of your original capital...
Second, liquidity in any oil & gas investment isn't the main reason investors, whether private, or industry invest in oil & gas...investors invest in oil & gas for the chance to make serious returns on their investment funds, and qualify for the tremendous tax breaks, and benefits that are associated with developmental, and exploratory oil & gas drilling investments...you do not get the tax benefits with a royalty investment program...they are enjoyed by the direct participation, working interest owner investors, who are willing to take some risk...while most royalty programs that I have seen are usually heavily promoted programs designed to be attractive to stock investors, or bond investors who are disappointed with their returns...
Third, when major new discoveries of oil & natural gas reserves are found by the best in our business, you get first right of refusal to participate further in a productive new leasehold interest, or Area of Mutual Interest' (AMI). This can further lead to more discoveries, and serendipity often associated with finding oil & gas at deeper depths, in new areas, or where it's been found before, but with new ideas, and better technology...not to mention the motivation to search which is the direct result of higher prices...
Fourth, royalty programs must continually add new holdings, and more old declining wells, to deal with the rapid declines associated with all oil & natural gas wells, with few exceptions...when you buy royalties you are hoping the natural decline curves won't interrupt your cash flow which is usually not much better than a single digit return on your money...
Fifth...Since I've been in the oil & gas business... now 24 years...I have observed that when the oil & gas prices are high...new promoters seem to gravitate toward our business, and they are often people who decide the time to make some money is at hand...they are almost never the best, or top people who 'stay the course', and make money a majority of the time in our oil & gas industry...which in my opinion... are the most successful major oil companies, and large independents...who are not out buying royalities...
If you would like to discuss what I believe to be the best ways to make money in the oil & gas industry, and with the type of companies to consider investing...just give me a call, or send an email with your contact information... Dennis [email]americanenergy@gmail.com] Ofc: 408 975 0800 Fax: 408 975 0803
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Fri Sep 02, 2005
'Investing Tips While Oil & Gas Pricing is High & Going Higher'
Investing in direct participation, working interest ownership in oil & natural gas developmental & exploratory fields is important for several key reasons...our currently high gas & oil prices which are going higher is only one good reason for investing in oil & gas at this time...this is our 'final wake-up call'...or as we were told in Viet Nam, no one falls asleep while on watch at a fire base...you do, and you and your fellow soldiers are dead...sorry to shock you, but we need to explore everywhere we can locate & recover potential oil & gas reserves, and we have to do it right now!
First, higher pricing keeps our exploratory, and developmental effort's robust, and most importantly stimulates investors to fund developmental efforts that it takes to drill targets that weren't 'economically viable' when prices were lower...in other words, we need the higher prices to stimulate development, and get people to assume the risk of investing, so we can go after more oil & gas...which is now more expensive to find, recover, and produce...and thus our major oil & gas companies, and large independents then look everywhere, drill deeper, and bring-into play more drilling rigs, and more manpower...
The ultimate result of our newest technologies, and much better computers, is the chance to apply our new break through techniques to find more recoverable oil & gas reserves, which there-by help us meet our steady and growing appetite for oil & gas, which we must have to run our economy...especially while we look-out, or forward during the next 5-10-15 years for alternate energy sources...
Alternate sources of energy will be brought into play...but not soon...we have to go after the world's remaining oil & gas reserves now...not later, and we cannot do it with oil & gas prices that are too low... since we must take the greater and greater risks, and expense associated with drilling deeper and deeper, and dealing with dry holes...always a part of drilling for oil & gas...
Second, we don't have the unlimited stockpiles of oil & gas in our strategic reserves that naive or miss-informed folks, or ignorant politicians who have other motives, might think we have...this isn't about emotion here, it's about cold, hard facts, and the application of logic and intelligence...
Third, worldwide demand is increasing by exponential degrees, because of many newly oil & gas reliant industrialized nations...which are now using more and more hydrocarbons, notably China...and therefore, most nations of the world are now 'net importers', rather than 'net exporters' of petroleum...
Fourth, we peaked some time ago in total production that we can deliver per day...the world demand, or consumption is presently about 84 million barrels of oil per day...many of the world's available reserves, are on the backside of production of their capability since all wells deplete their reserves...and very quickly after after the first five years of their productive lives...since about 60% to 70% of total recovery takes place in the first five years of a typical gas & oil well's life...and when you remove the first 50% of a well's recoverable reserves, the remaining 20% to 30% in reserves are much harder to get, and the decline curves steepen greatly...not to mention the lease operating costs increase to the point where you reach the 'economic limit' of a well's life, which simply means the expenses equal the gross cash flow, which is when you then plug and abandon the well...but don't take my word for it...just ask any petroleum engineer, or a bank familiar with loaning money on oil & gas well production, and reserves... we are literally running out of production capability and reserves, and we are not finding enough new commercially productive oil & gas fields to replace what is being used-up...
Fifth, we can use hydrogen to use fuel cells, which still take natural gas to power them, we can use nuclear energy, and other alternate sources of energy, and as we develop these new methods of meeting some of our energy needs, we will become less reliant on oil & gas, but it will take some time...hey, maybe we need to figure out how to produce 'anti-gravity' machines, to propel us along, and fly, or transport ourselves...it would be nice...but for now...we need to keep looking for oil & gas reserves, to replenish our dwindling reserves...
Call me if you want to be part of the solution as a prospective investor...and like great tax advantages and benefits, plus excellent cash flow while investing with oil & gas companies who have the best track records in the oil & gas business today...
Send me an email at: americanenergy@gmail.com or just call me...please leave a message, if I don't pick-up right away at: 408 975 0800 cell: 805 701 7761 or my Fax: 408 975 0803. If you provide your contact street address and phone numbers, I answer your requests first...and will get some information, and email updates to your immediately...remember qualified investors only...thanks, Dennis
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