Investing
in oil and gas industry can be very advantageous. After analyzing
the different options, their structures, and the level of risk
involved, you can make a choice of a certain type of investment that
can prove to be advantageous to your investment objective.
The benefits are several:
Tax Benefits -
According to Newsweek drilling is the very best tax-advantaged
investment. 65% to 80% can be written off in the first year of
certain investments and for certain others, it is 100% tax
deductible. The investor's share of expenses in intangible
drilling costs, intangible completion costs, tangible completion
expenses, and depreciation costs, along with depletion
allowance, and alternative minimum tax make these investments
tax-advantageous to the investor.
High Financial
Rewards - Certain investment options afford a return of capital
within a year; returns that are better than 10 to 1; more than
50% annual rate of return.
Low Risk
Potential - With advanced technology, the risk factor has been
minimized. Several projects have a 90% chance of success rate.
Availability
of Drilling Prospects and Low Drilling Costs- There is a wider
choice of small drilling prospects available now than in the
past. Moreover drilling costs are at an all-time low with a
decreasing rig activity.
Higher Demand
and Consumption - The demand and consumption of petroleum are
doubling every ten years. So, at the present stage where there
is no viable alternative fuel resources, investing in oil and
natural gas are really advantageous.
Lacks of
Conservative Sources of Finance - Since the traditional sources
of money are no longer available, the capital of individual
investors are in demand, and so they stand to gain from these
investments.
Government
Support - Governments recognize the value of oil and gas
investments for the economy of their countries. So they
encourage domestic drilling with special tax concessions.
Investors in oil and gas have a distinct advantage in this.
If you want to
make a very advantageous investment choice, oil and gas investments
are the best.
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