Why Invest in Oil - EnergyFunders
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Why Invest in Oil

You’re probably asking yourself of why invest in oil, knowing that it is a category of your portfolio that requires tremendous work.

But, If you’ve read this far, you likely believe that adding access to a commodity from the point of extraction would be a solid addition to your portfolio. And, you’d be right! Crude oil being owned at the point of extraction can be a very lucrative addition to your investing portfolio. So, why invest in oil?

You’re using science.

  • When you invest in the most recent photo sharing application or the most recent social network, you’re not investing using science.
  • Oil investments are the result of the application of the scientific method.
  • A geo-scientists hypothesis about the existence of oil deposits trapped thousands of feet underneath the surface of the earth.
  • Tests are run, existing well results are researched, and the hypothesis is tested using available datasets.
  • It is only until the scientific method has been exhausted that new oil wells are sought to be drilled and investors are given the final investment opportunity.
  • The ability to use science to gain a bigger picture and reduce risk in your investment is a key reason to invest in oil and gas and crude extraction.

 

Deals can be structured to reduce risk.

  • After the scientists vet the project, the transactional lawyers can further mitigate your risk.
  • An oil deal is a thinking man’s game (or, a thinking woman’s).
  • There are a myriad amount of ways you can be taken advantage of based on the structure of the deal. However, there are also a number of ways that you can shift the playing field to your advantage and reduce risk in the oil investment.
  • Proper contracts can reduce risk by making payments contingent on meeting project benchmarks. Oil investments can be made in distressed assets in deals that require the operator to obtain a loan on the property, allowing for a multiplier effect on your capital if the oil investment is structured smartly.

The culture of the industry requires greater returns.

  • A banker has basically knocked the ball out of the park if he can guarantee ten percent returns.
  • An oil and gas operator would be out of business making ten percent his standard return amount.
  • The image of Spindletop gushing oil and making instant millionaires out of oil investors has been deeply ingrained into the psyche of the industry.
  • Oil investments target larger returns.
  • But, by turbo-charging the ability of the investor to diversify, EnergyFunders allows investors to place smart investments in the oil industry.
  • It is true that oil investments have traditionally been riskier.
  • But, real estate can crash. The stock market can crash. Most start-ups fail. Companies go bankrupt all the time.
  • No one is advocating abandoning traditional investments. Because all investments carry with them the possibility of risk, that’s why you diversify.
  • Oil investments are no different.
  • But, now, you can obtain proper diversification in oil and gas. It’s a great amount of upside, tempered by the new unprecedented level of deal flow and diversification enabled by the EnergyFunders platform.

 

Follow these rules to win:

  • Pick projects that can be successful without high prices.
  • Diversify, diversify, diversify across many oil wells, assets and operators.
  • Invest directly into the oil well.
  • When oil prices decrease, invest smarter to reap rewards.
  • Don’t let a pamphlet satisfy your due diligence.
  • Cut out the middleman.
  • Demand the transparency you deserve.
  • Don’t go it alone. Get aligned with quality oil and gas professionals.

With EnergyFunders, you’re aligned with a strong multi-disciplinary team of professionals who only win if you win.
Our profit is from a carried interest in a successful project. If you’re ready to start winning in oil and gas, together, get started now.

Get started by clicking below.