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Why Should You Invest in Oil and Gas Drilling?

There are plenty of investment avenues that you can choose to take to build wealth, from real estate, to mutual funds, to stocks, and so forth. However, one such lucrative channel to take is to invest in oil and gas drilling. By investing with a company that utilizes the latest innovative technological developments, you’ll be able to make a lot of profits through a variety of drilling projects.
Spike in Global Demand
It is estimated that energy consumption across the globe will increase to 53% by 2035. Rich, abundant oil lands are just waiting to be tapped into. If you become an investor in these potentially profitable regions, there is plenty of money of be made.
Benefits of Investing in Oil Wells
Today is a fantastic time to own a stake in leasing land for oil drilling activities in core areas. Why? The simple economic equation of supply versus demand. With so much demand and dependence on oil across the country and the globe, there will always be a need for oil. As such, there will always be a good reason to invest in oil.
Consider the tax benefits that come with oil drilling investing. You will be able to take advantage of intangible drilling costs. For an oil producing well, about 70% to 85% of an investment is comprised of these specific types of costs which can be written off your regular income over the first year. These include labor-intensive costs, like the drilling contractor and other services, which are reported to investor at the end of that year.
You can use your investments in oil drilling to diversify your investment portfolio. Since real estate prices tend to move unpredictably, it can be a challenge to attain a profitable exit strategy. Many investors have chosen an oil investment in an effort to diversify their portfolios.
In addition, if you’re an investor in an independent oil project, the depletion allowance come tax time is 15% of your specific share of the property’s gross income based on average daily production, up to the depletable oil gas quantity.
If you ever happen to invest in a dry hole where no oil is being produced, you will be able to write off 100% of every dollar you invested as a loss against your regular income in the first year.
There’s not only money to made as far as your investment is concerned, there is also a lot of money that can be saved come tax time.

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