Why Invest in Natural Gas

Why Invest with EnergyFunders?

Welcome to EnergyFunders. Thanks for taking time to consider why you should invest your money with us. We are the first to bring oil and gas investors and operators together through a crowdfunding platform. This allows investors to place a smaller amount of money in each project… invest in multiple projects… and reduce the risk that inherently comes with oil and gas investing. And it’s easier for small to medium-sized operators to raise capital for their projects. I’ll make it simple: There are five great reasons to consider EnergyFunders. Here’s the first reason.

REASON #1: A BETTER CHANCE TO MAKE A PROFIT ON YOUR OIL AND GAS INVESTMENT

While it’s impossible to eliminate risk, we do our best to reduce some investment risk. How do we do that? By focusing on projects that have produced oil in the past or are currently producing oil.

 

EnergyFunders is focused on re-working projects, re-completion projects or in-fill drilling.

 

Our projects don’t find new oil for the first time. We invest in operators who are extracting oil from a proven reserve. The percentage of successful projects increases a lot by working with proven reserves.

 

The success rates from “wildcatting” oil and gas projects—drilling where there weren’t known reserves before—is approximately 20%Compare this to extracting oil from a proven reserve, where the success rate is approximately 80%.

That’s a 4 times better chance for a profitable oil & gas project with EnergyFunders than with a new exploration project.

 

And here’s the second reason we make it even better for investors:

REASON #2: REDUCE RISK WITH PROJECT DIVERSIFICATION AND DETAILED INFORMATION

The oil and gas business is a high risk, high reward investment niche. While it’s possible to make a good return on your investment, there’s always the chance you could lose all of your investment.

 

Our crowdfunding business model allows you to spread your risk over more than one project. And the minimum investment amount is much lower than you’ll find elsewhere. You can look at each project in detail to make sure it’s a good fit—before you invest any funds.

 

And each project includes detailed information, such as:

 

  • Complete recording of project conference calls and questions from investors – even tough ones, such as: “Can this project make money if the price of oil drops to $30 or even $20 a barrel?
  • Detailed geologist’s reports including Induction/Gamma Ray Logs and Mud Well Logs
  • Biography of the Operators, Team Members and Partners involved, so you know the people – as well as the project – you’re investing in
  • Estimated barrels oil or MCFs of natural gas that the project could produce
  • Net income and cash flow projections with the best, worst and medium-case scenarios, so you’ll know the range of possible outcomes from each project
  • Detailed production and geologic history of the project

 

And plenty more detailed information so you can make the best investment decisions possible.

As good as this sounds, we took yet a third step to increase the odds of a profitable return for investors:

REASON #3: ANOTHER WAY WE INCREASE THE ODDS OF A PROFITABLE PROJECT

With regular investing in oil and gas projects, operators have to talk directly with potential investors…answer questions about the wells and projects…and it’s a distraction from their main business.

 

While they’re glad to provide the information, this takes away valuable time, energy and focus…that needs to go towards the work at hand. EnergyFunders acts as the Investor Relations department for each company, well and project.

 

We provide the information and answer any questions you may have on one or more projects. This allows operators to focus on what they do best:

 

Get barrels of oil and Mcf of natural gas out of the ground.

 

This also increases the odds of a profitable project. That’s because the operators’ time and energy are focused on the work at hand. Fewer distractions reduces the odds they could make mistakes that could cost them—and you, the investor—oil and gas production, and money.

 

While these are great advantages for an investor, we’ve taken it one step further to ensure that our investors’ interest and our interest are one in the same:

REASON #4: WE DON’T MAKE MONEY UNTIL OUR INVESTORS MAKE MONEY

While EnergyFunders was already a good business and investing model, we wanted to make it even better. With most oil and gas projects, partners can access the funds when they’re deposited in the bank.

 

However, since we’re always a 10-20% partner in each oil and gas project, we wanted to make sure we were in the same shoes as our investors.

 

That’s why we don’t make money until a project turns a profit.

 

This gives us even more incentive to find the projects with the best chance of turning a profit. And due to the high-risk nature of oil and gas investing, you get to keep more of those profits.

 

That’s because our government realizes the critical need for US-produced energy, and it gives investors excellent tax incentives to invest in oil and gas projects.

 

Bringing us to our fifth reason for investing in an oil or gas well, you’ll discover:

REASON #5: OIL AND GAS INVESTING HAS MORE TAX ADVANTAGES THAN STOCKS OR REAL ESTATE

The only tax deductions you can receive with stock investing are when you lose money in the markets…or pay for educational or advisory services.

Short-term capital gains (assets held for sale or exchange for exactly one year or less) are taxed at your ordinary income tax rate. Long-term capital gains are taxed at either 0, 15 or 20 percent. (If you’re reading this message, we realize you aren’t in the 0% tax bracket).

 

Investing in real estate is more tax-friendly than the stock market. It allows you to depreciate the cost of the property over 27.5 years on what’s called a “straight-line” basis.

 

Here’s a quick example:

 

If you buy a property for $100,000 and divide it by 27.5, you can deduct $3,636 per year. The only downside? To get the full tax benefit, it’ll take almost 30 years—and that’s a long time.

Let’s take that same $100,000 and look at the tax consequences in an oil and gas project.An investor can deduct approximately 80% of this amount in the first year because of which are any cost that cannot be re-sold (or recovered) later, Intangible Drilling Costs (IDCs),

 

The investor can also deduct 14.29% for the Tangible Drilling Costs (TDCs)—any asset or capital expenditure that can be re-sold later. Tangible Drilling Costs are depreciated according to standard IRS depreciation rules over seven years—the same as “straight-line” depreciation on real estate.

 

In Year 1, an investor can deduct $80,000 for the IDCs; and $2,858 for the TDCs.

 

This comes to a total tax deduction of $82,858 in just the first year.

 

Download our detailed Report here.

 

Now you can see how oil and gas investing can drastically lower your tax bill compared to investing in the stock market or real estate.