Archives: March 2007
Sat Mar 31, 2007
'Oil & Gas Investing, Acquiring Assets & Learn How To Sell for Profits'
Oil and Gas Investing, in oil & natural gas leases, developing, and selling for profits.
Investing in oil & gas leases with excellent upside, while having the objective of developing these leases to increase production to optimum levels, can lead to a purchase and sale at a multiple that can help investors make excellent profits. This can be accomplished while legitimately writing-off your investment dollars you invest.
Investors who realize making money in oil & gas drilling, and development programs isn't just about getting monthly revenue distributions, and cash flow, can do quite well. It's more likely about taking your tax benefits, and at the right time, or when the right company comes along to purchase your private ownership assets at a significant profit, be able to capitalize on your foresight.
There are many companies, pension plans, and others with both private, and public sources of capital who don't want to go through the involved process of finding, and establishing production, while meeting all of the requirements of an oil & gas development plan. Following the state guidelines, and legal requirements to properly structuring a private investment, and completing the development plan can be a daunting task to passive investors, or promoters, and companies with passive capital to invest. However, if you know what you are doing, and can stay focused on your exit strategy, and can wait for a sale at a big profit, you can do well.
Investing in oil & gas drilling & development programs can take some time for the ultimate pay-off, but for those who can wait for the pay-off, all while taking the significant tax benefits associated with oil & gas drilling programs, the capital, and time risk, can be justified, and the profits more than worth your patience.
The key to making any oil & gas investment where you can expect to achieve a successful outcome, has to begin with the selection of a legitimate oil company, and operator. You most likely will do the best by directly investing with an operator, or owner of the company. You need to be able to talk to the decision makers, and find-out exactly what your investment is doing, and the development progress the company is achieving. Communication in both writing, and by telephone is an important part of knowing what is going on, and when you can expect to see the results you seek.
Call for more information...Dennis 408 975 0800 Cell: 805 701 7761
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Mon Mar 19, 2007
'Investing in Oil & Gas Profitable Drilling Programs'
Investing in any profitable oil & gas drilling program requires a well organized plan of lease acquisitions, and a development system allowing your partners, and you to take advantage of every opportunity you can identify during your selection process to make money in oil & gas development programs.
Investing in Oil and Gas developmental drilling programs is usually going to involve implementing a complex effort which involves working with many experts, and using a lot of equipment. Investors need to know an over-all development plan is sound, has great upside, and the expertise to complete the plan of development can be accomplished with the manpower, and equipment available in a given area being targeted. This is easier said than done, simply because now days there is a shortage of experienced people to do the oil field development work, while the equipment is scarce, and everyone needs it right away.
The only way I've seen this business work correctly today, is to be working with long term friends, and associates who count on one another to finish a job, or procedure, and who won't leave you high and dry, and without equipment when you need it. Timing is crucial in our industry, and there are many times when a completion rig, or fracing equipment, etc., immediately needs to be at your drilling, or development site. You want to know in advance of beginning your development operations, that you will have associates with integrity, and discipline, and they will be there when you need them to be. I consider this more important than any other single thing in our business when it comes to being successful.
Big isn't always better in our business, nor is drilling deeper the best, or only way to make big money in our industry. Big often means expensive, and drilling deeper usually means only a few experts, with the best equipment can afford the extraordinary capital costs needed to engage in the very complex, and very expensive drilling operations associated with the deeper wells. Also important to note, is the bigger companies don't negotiate with you on costs. You pay, or you don't get to participate. In my opinion, the bigger companies have a monopoly on the equipment, and can charge what the traffic will bear...and the traffic bears a lot. The problem with this scenario, is simply put...you must find a lot of oil & gas to justify the expense of the deeper, and very technically complex drilling plan it takes to go after the deeper targets. Dry hole risks are very high, and the time to get the returns is even longer.
It's well worth noting, the major oil companies make money in their pipeline, and gathering system operations, their refineries, and their retail out lets...often only breaking even on the production end of our industry. If you are a private investor, your only profit center is going to be at the production end of the business. Private investors do get substantial tax benefits though, and this may be one of the last justifications remaining to invest in oil & gas drilling programs. Dennis 408 975 0800 Cell: 805 701 7761
If you would like to discuss the oil & gas investment business further just send me an email or call me. americanenergy@gmail.com
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Tue Mar 06, 2007
'Investing in Oil & Gas Drilling Programs'
Investing in oil and gas development programs today pretty much follow one or both of two paths. Investing in primary recovery operations involving drilling new wells to pristine, or previously undrilled locations where an anomoly, or closure, or trapping mechanism is thought to exist, and is one path to finding, and establishing new oil & gas production.
Secondary recovery operations typically involve using techniques which almost always include recovering excess formation water with some type of pump. If there is enough total volume of water, you just pump it out, and dispose of it. Sometimes its necessary to inject more water by pressuring-up a low pressure formation with water injection wells...this can be necessary to remove the remaining oil floating on top of the water. Water disposal wells must be permitted, for use to dispose of large amounts of water, to allow the remaining oil production which can be recovered from a well. Removing large amounts of formation water, can also involve the use of specialized pumps such as 'Reda submersible pumps', or 'jet pumps'. Submersible pumps, which are shaped like 'torpedos' are lowered into a well bore to recover any water, or oil expected to be found in often multiple, and productive oil zones, while recovering sufficient quantities of total fluid to make a successful well. These operations are involved, require state involvement, and permit approvals. The last 50% of the recoverable oil reserves can usually only be recovered with some type of secondary recovery system.
So, those of us in the oil & gas industry are committed to using the specialized techniques, and methods that are most effective, which are especially important in secondary recovery. Some oil fields are better candidates for using the secondary recovery methods than others. The key is having adequate total fluid in large enough reservoirs, with enough productive zones to justify setting-up a secondary recovery system. Equally important is having enough porosity, and permeability, plus zone thickness and sand quality, to be successful. This is where the quality of your analysis for what is most important relative to total costs is crucial. Some areas, and fields are better than others, and feasibility must be determined in advance, and well before you start spending too much money.
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