Have you ever looked at the big gas and oil companies and thought, that you would want to have a piece of the pie, when it comes to enjoying the wealth that many of the big Oil & Gas companies have benefited from over the years, whether it be from the actual production of oil and gas, or the end sale?
Unfortunately over the years many potential investors, of which you may very well be one, have received telephone “boiler-room” sales calls, offering high returns that can be obtained quickly if you invest upwards of $100,000 or more into a single oil or gas well exploration.
Or as is often and rightly the case, you knew what type of call it was, and through your justified scepticism you hung up the call.
Well despite the boiler room sharks, there is no doubting the reality that oil and gas companies continue to see profits increase and record levels of wealth is being created by them, and if you buy stocks in their companies, you will hopefully benefit in some way as hopefully their stocks increase.
The traditional method of oil and gas investing in wells, will produce results, over the long term, but the levels of success can be diminished if the first few wells you invest in do not produce a return. You invests in the first 3 and get nothing, but you want to keep going, because you know from data that the field is able to produce, it just wasn’t in those first three wells. So you invest int eh fourth and there is a small return, and so you put that into the 5th and bingo, you strike gold. It took 5 different investments in 5 different wells, but you got a good return.
Now to keep taking this approach takes time and a lot of money. But if you could invest in the oil and gas wells like you invest in other ways, through diversification, then things would be better. After all spreading investment allocations over lots of wells is what the major oil and gas companies do, to limit their losses, so if you could do the same, you too would benefit. Unfortunately it is not possible with this traditional method of oil and gas investing.
While that is the case, with traditional investment, there is an alternative available to normal investors like me and you, that does enable you to build wealth just like the major Oil & Gas Investment Companies.
How to Invest in Oil & Gas Just Like the Major Oil Companies
To explain this alternative method, we will explain how each method works
As the investor you place you entire investment into one single well, be it gas or oil. Now evidence shows that around 50% of normal wells that are drilled, end up being dry. In fact statistics show that on average, only one out of every ten producing wells, is actually classified as outstanding when it comes to production. Furthermore, the risk of loosing your investment by this method of investing in one well at a time, is greater than 50%
So if we take the above mentioned statistics concerning traditional investing, it is fair to say that if you do invest this way, you don’t have much hope of a good return. The traditional method shows us the obvious fact that exploratory oil and gas drilling will often result in there being either huge dry hole losses or at best, marginal productive wells that never really achieve payback of the original investment.
So if this is the case, which we all know, if we have done our basic homework, is the situation, how then are oil and gas companies able to be successful? The answer is simple. The oil and gas companies are successful because they invest in a diversity of top-quality well prospects at the same time.
Let us now explain this alternative method that the companies are using.
They will decide to spread their capital investment across, lets say, nice oil or gas projects.
Out of those nine wells, around three of them will come back as dry. The remaining six wells will be classified as commercial because they are producing, and out of those six, two, maybe even three, will be extremely profitable. And what that means is that the risk of losing their entire investment over the wells becomes insignificant, compared to the return.
So having explained how the oil and gas companies ensure a good return on their investment, compared to the old traditional method of investing we are used to, is it possible for us as investors to do the same?
The short and simple answer to that is yes.
There is an oil and gas investment company who provide the means to invest exactly as the big players do. The company is called Clarke Energy Fund Management and their innovative, paradigm-shifting strategy for investing copies that of the gas and oil companies.
The investment they offer is called EPF-IX which is short for Energy Partners Fund 9, nine being the number of wells you invest in at one time. And on of the major benefits of the fund are substantial quarterly income dividends, based on the entire well portfolio.
As an Energy Partners Fund investor, you would become what is referred to as ‘Independent Small Producer’. This means that you are able to benefit from all the tax breaks that are available to an IRS-recognized pass-through oil and gas business, as well as also benefiting from the investment power that the Energy Partners Fund company has, with regards to high-quality, high-impact oil and natural gas prospects that are available.
The video below explains it in more detail, or you can do straight to their website and get more information on how the fund works.