The Unique Benefits of Oil and Gas Investing
HIGH RETURN POTENTIAL
This is the entire reason for investing in the first place, right?
Oil and gas investing offers a high return potential. It can also be riskier, which is why EnergyFunders offers you ways to diversify your investment into multiple well projects or investing in several projects at different stages — exploration, development and operation.
TAX BREAKS FOR INVESTORS
The most obvious advantage of investing in oil and gas stems from the large tax breaks for investors Uncle Sam gives. You can deduct up to 80% of your investment within the first year. This gives you a sizable instant return on investment, even if you have a dry hole.
You can also write off the entire amount within five years. Plus, you will receive a 15% depletion allowance against oil and gas revenue every year.
Make sure you have a qualified and competent CPA or tax preparer who understands oil and gas investing laws to make sure you get every deduction possible. Read more about the tax breaks for investors.
Oil and gas investing also offers long-term return potential. Some wells are in production for a decade or more, giving you passive income for years.
FASTER CASH FLOW
A profitable oil or gas well can be similar to owning your own annuity that provides reliable, consistent cash flow. With most financial annuities, you have to pay premiums for several years before you can receive a payment. Compare this to a profitable oil and gas project, where you’re eligible to receive a payment in the month or quarter it hits the pay zone. You may only have to wait a few months to a year for that first payment, instead of five, 10 or 20 years.
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