Oil and Gas Investments and Risk

Given the recent recession, finding an investment vehicle that can truly benefit your portfolio may seem like an increasingly frightening and risky task. Many individuals, however, are increasingly finding not only a great cash flow but a substantial long-term opportunity in oil and gas investments. One chief benefit is that the industry is not quite as dependent on where the economy is going as is almost all other investments.

That isn’t to say that there is no risk in oil and gas investments – as in any kind of investment you might make, there is always going to be a factor of risk involved. However, there is a way to offset the risk merely by making oil and gas investments; the offsetting vehicle is built right into the investment itself. That is, the federal government in an attempt to motivate growth in the industry as a competitive strategy against foreign oil offers hundreds of thousands of dollar in tax incentives for investors. Many investors in the forty percent tax bracket are attracted because of the ability to almost immediately shelter the investment against the capital gains tax. Moreover, these incentives are secure and have been in place for at least three decades.

A second factor that mitigates against risk is demand. It isn’t likely that the demand for oil and gas will decrease significantly in the near future, nor will fossil fuels be replaced by alternative energy sources any time soon. Workable alternatives are far from being fully developed, and a complete restructuring of society and culture would have to occur before the demand decreased to such an extent as to make oil and gas investments unprofitable. To this end, recession does not have a huge impact on the industry or on the investment. In fact, when Wall Street begins to seem untenable, more people turn to more certain financial vehicles, such as oil and gas, which strengthens the market.

Your risks can be managed by the type of investments you seek as well. It might be far more risky to go with a wildcatting outfit that hasn’t shown any proven oil fields than with a proven company with proven oil fields currently being deployed. Choosing wisely can help investors to diversify while simultaneously helping to offset increasing costs for energy production.

Another reason to get in soon is that there is apparently a mini-oil boom underway with dependence on foreign oil constantly being reduced and new resource discoveries in shale rock and deep sea drilling. These developments make oil and gas investments one of the most exciting investment opportunities available.

Oil Gas Investments – Fossil Oil Company, LLC is an independent oil and gas exploration and production company whose management and consultants collectively have more than 130 years’ experience in operating and investing in oil wells. Our team is made up of engineers, geologists, project managers, and financial consultants that deal exclusively in the oil and gas industry. We only select projects with sound fundamentals and a demonstrable upside. Understanding every facet of the process—from discovery to assessing value—is what allows us to present you with smart oil and gas investments. Visit http://www.fossiloil.com/ or call: Office: (713) 978-7986 | Toll Free: (877) 822-5802