Archives: January 2007
Fri Jan 26, 2007
'Achieving Success in Oil & Natural Gas Investing'
Investments in oil & gas private placements, or direct participation projects should only be made by investors who understand, or learn how to implement a deliberate plan to minimize risk, while clearly understanding a likely, and reasonable risk/reward ratio...investors need to accept the over-all risk they must take to achieve the upside necessary to justify taking the risk in the first place.
Investing in oil & gas projects usually takes a check-list approach in my view. Investors should realize that almost all oil & gas development operations involve technical challenges. Deals take time to develop and come to fruition, actually, often up to two years before significant pay-back of capital is possible.
Oil & Gas investing is not for investors who don't need the tax advantages, or who simply think they are going to get steady, and fixed rates of return each month immediately after they first start investing. The only exception that I know of is when you find an oil and gas investment which is nearly fully funded already, and is one which is beginning to achieve some level of success when you find it.
Spreading-out your capital in multiple well drilling programs with people who control, or operate their own deals makes more sense to me than trusting a promotional company who wants to test a new drilling location with your money.
Investing in the Stock market where you get liquidity with public stocks on the larger exchanges, and your principal is typically safer is a better place to start when considering oil & gas investing.
Call me if I haven't frightened you away from considering direct participation, private placement investing in oil & natural gas investments. Dennis 408 975 0800 Ofc 805 701 7761 Cell.
[0] comments (377 views) | [0] Trackbacks [0] Pingbacks
'Investing Rules for Oil & Gas Explained'
Investing in oil & gas drilling programs, whether developmental, or exploratory...requires careful consideration, and entails risk no matter what promoters, or oil companies say to you to attempt to minimize the many risks associated with any oil & gas investment. Looking at different deals offered can seem like a crap shoot...and to some extent this is, and has always been the case in oil & gas investments. However, there are some things you must find-out which can help you rule out the deals you probably want to avoid during your due dilligence.
My feeling is if you don't need tax write-offs, and can't utilize the many tax benefits you get with oil & gas drilling programs, you probably should not make the investment. The only exception would be if you want to add oil & gas investments to your investment portfolio, you can afford to lose your capital, and your chief purpose is one of boosting the over-all returns in your portfolio, and finally again, you need the tax benefits.
One can make a very good argument for increasing oil & gas pricing...particularly oil, based on world wide increasing demands. Certainly, if you believe the prices are going-up, regardless of our search in the short, and mid-term for alternative energy, or because of our conservation efforts, then you should consider making very wise, and multiple, or diversified investments in carefully selected oil & gas investment opportunities.
I like working directly with drillers, and operators...not promoters who do not, and cannot control a deal, it's expenses, or it's goals.
I don't like single well oil & gas investment programs, with small working interest ownership being purchased by promoters...I only like dealing directly with an operator who controls 100% of a deal, less the land owners over-riding royalty, and where the net revenue interest is high, and lease operating expenses low, and controllable. This is not possible, based on my experience when investing with promoted, or syndicated deals offered by these groups investing from 'afar' and who are most often 'beholding' to the majority interest owner, who is usually the operator. The main problem is one of control, and knowing you are getting the same quality of ownership interest as the management. I have been in the business for 25 years, my associates longer, and I feel very strongly about this belief, which is based on our considerable experience.
Let me know if you have any questions about my update. Thanks, Dennis
408 975 0800 Ofc. 805 701 7761 Cell.
[0] comments (489 views) | [0] Trackbacks [0] Pingbacks