So, why invest in oil and gas? It’s a category of investment that requires tremendous research and education, and, frankly, a lot of work.

But, if you’ve clicked this far, you’re likely already formulating some ideas in your head on why to invest in oil and gas. Let’s run through them.

It’s Scientific.

 

  • Why Invest in Oil and Gas  The fact that you can use science to minimize risk is a major reason to invest in oil and gas.
  • Why Invest in Oil and Gas  You aren’t trying to ride the most recent trend in the start-up world.
  • Why Invest in Oil and Gas  You aren’t betting on whether a bunch of teenagers will like your app to share photos more than someone else’s app to share photos.
  • Why Invest in Oil and Gas  Investing in oil and gas is all about applying science to minimize risk.
  • Why Invest in Oil and Gas  Engineers and geologists create hypotheses as to where hydrocarbons (oil and gas) lay trapped under the surface.
  • Why Invest in Oil and Gas  Then they use existing results and data to test their results.
  • Why Invest in Oil and Gas  The final drill site is selected based on the scientific method.
  • Why Invest in Oil and Gas  Or, an engineer might use the scientific method to troubleshoot an existing well that is hypothesized could hold additional production.
  • Why Invest in Oil and Gas  The scientific process plays a major role in the oil and gas industry.

You can minimize risk in the structure of the deal.

 

  • Why Invest in Oil and Gas  Beyond using the scientific method to reduce risk in the selection of projects to invest in, you can structure deals in such as way as to minimize risk.
  • Why Invest in Oil and Gas  This is the thinking man’s game.
  • Why Invest in Oil and Gas  You aren’t just throwing money at an app that messages the word “Yo” to a friend or colleague.
  • Why Invest in Oil and Gas  Yes, that was a real thing.
  • Why Invest in Oil and Gas  Instead, with oil and gas, you can structure your deals in such as way as to reduce risk. You can diversify your project across multiple wells owned by the same operator. You can make payment contingent on meeting progress benchmarks. You can seek out assets that are distressed that can be purchased cheaply and re-worked for relatively small amounts of capital to generate strong returns.

It’s a bigger return environment.

 

  • Why Invest in Oil and Gas  Oil and gas investments are a bigger return environment that real estate.
  • Why Invest in Oil and Gas  But, oil and gas is riskier you might argue.
  • Why Invest in Oil and Gas  But, what’s riskier? Getting a 10% return on investment—if you’re lucky—and hoping the real estate market doesn’t crash, or diversifying your risk across as many oil and gas wells as possible where savvy professionals have used the scientific method to reduce risk and have structured the deal in such as way to reduce risk even further?
  • Why Invest in Oil and Gas  Here’s the catch.
  • Why Invest in Oil and Gas  You don’t even have to answer that question.
  • Why Invest in Oil and Gas  No one is advocating abandoning the safe, low ROI investments provided by REITs, the stock market, and bonds, etc.
  • Why Invest in Oil and Gas  But, you do need to invest a portion of your portfolio in oil and gas to help give your investment portfolio the ability to generate stronger returns.

With EnergyFunders, you can invest in oil and gas by doing the following things we told you about earlier on, a few pages ago:

 

  1. Why Invest in Oil and Gas  Negotiate your deal to win in any price environment.
  2. Why Invest in Oil and Gas  Diversify across many wells, many assets.
  3. Why Invest in Oil and Gas  Invest in the well.
  4. Why Invest in Oil and Gas  Diversify your project type.
  5. Why Invest in Oil and Gas  Don’t walk away when prices are low.
  6. Why Invest in Oil and Gas  Don’t let a brochure satisfy your due diligence.
  7. Why Invest in Oil and Gas  Don’t pay retail prices.
  8. Why Invest in Oil and Gas  Understand the deal structure.
  9. Why Invest in Oil and Gas  Insist on transparency.
  10. Why Invest in Oil and Gas  Be aligned with a team of oil and gas professionals.
  • Why Invest in Oil and Gas  Remember, our sole revenue from a project is a small carried interest in each project financed through the platform.
  • Why Invest in Oil and Gas  We’re right there with you.
  • Why Invest in Oil and Gas  On the same team.
  • Why Invest in Oil and Gas  We believe in diversification, transparency and empowering the investor.

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