Is Oil Well Investing Profitable?

Is oil well investing profitable?

Whether or not oil well investing is profitable depends on a number of factors. Every oil well investment has inherent risk: the exploration company could run out of money, the well could be dry, or the cost of obtaining the oil could be much higher than predicted. But on the average, oil well investing is and will continue to be extremely profitable thanks to advancements in technology that not only make it easier to identify locations where oil will definitely be found but will also allow oil to be extracted from new and existing sources more easily.

Oil well investing has been so profitable in the last decade that we’re experiencing an American Oil Revolution.

With oil booms in North Dakota, the Marcellus Shale region of Ohio, the West Texas oil boom, and the South Texas oil boom, there is ample evidence of profitability in oil well investing. It’s reminiscent of the oil boom days of the late 1800s.

Why Is Oil Well Investing Profitable?

Regardless of the efforts being made to create more sustainable energy options, there is no energy source capable of meeting the increasing global energy demands. The world relies on oil well investing to continue to develop the supplies that meet the energy demand for everything from manufacturing to operating vehicles. Combine that demand for oil with the deep-seated desire Americans have to once and for all be energy independent, and there is no wonder why oil well investing is profitable.

The Difference Between Oil Well Investing and Other Energy Investments

The reason oil well investing is profitable is because the qualified investors who invest in oil well exploration and development become partner owners in the oil wells in which they invest. This means they receive the benefits of ownership, including the ability to deduct the cost of expenses (both tangible and intangible) as well as receive a number of additional tax benefits – whether or not the oil well produces.

This is far different from investing in stocks, mutual funds, and other paper-based investments that depend on the decisions of a board of directors and c-level leadership. Oil well investing is an on-the-ground investment, working directly with the drillers, developers, and land owners to work toward the goal of energy independence and drilling success as partners.