Books on investing in oil and gas

I would definitely recommend to anyone looking for more and helpful information in the industry, be they novice, or seasoned. I recently inherited a bit of money, and I wanted to get some information on different industries before I decided where to invest the inheritance. I bought this book looking for an in depth look at the oil and gas industry, and was not disappointed. Not only does this book go into great detail regarding the industry's standards and practices today, it gives a great deal of history of the industry, which I found immensely interesting.

I actually expected this to be a bit of a dry read, given the subject matter, but that really wasn't the case. I'm thrilled that this was the book that I chose to help me make a decision about that inheritance. The author does a spectacular job in explaining the whole industry and process as a whole. By implementing this new strategy, without being required to drill all the wells, projects can be completed faster. Because no one truly knows the timing with the markets or oil and gas prices, having built-in exit strategies over the life span of a project is important.

I believe offering investors a new deal with innovative investments and planned exit strategies is important for the future of oil and gas investments. While we certainly never guarantee our future projects will be successful, in my opinion, this new investment model of combining the oil and gas mineral acres and development by drilling the proposed wells provides our clients a better opportunity to achieve positive returns.

When you combine the cutting-edge technology for extracting hidden oil with our business model and the global demand for oil, participating in the energy investment game today could enhance your financial well-being for many years to come.

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This section provides details on how products such as transportation fuels are created, an in-depth look at the major refining process that take place, feedstock preparation, refining operations, catalysts, yields, and processing requirements. It emphasizes the vital importance of how the latest technologies, such as hydrocracking, catalytic cracking, and alkylation, are used by the best refineries in the world to increase yields and profits. The refining business is critical to our global economy, and this is why special attention is given to finished products and specifications as slight changes in the refining industry can bring about startling changes in the marketplace.

Only once we have a better understanding of the industry as a whole can we begin to analyze the trends that are likely to happen globally, nationally, and locally in the future to come. If it is possible to see into the future, if only a little bit, one may have the potential to realize an immeasurable amount success.

Being written by an academic and professional expert makes Fundamentals of Investing in Oil and Gas one of the most up-to-date and exceptional books available, providing readers with a comprehensive and easy-to-follow guide to understanding the oil and gas industry.

Though easy to read, this book is useful for anyone who wants to expand their knowledge about the industry. For example, if apple crops fail one year and the price of apple juice goes up, people can instead purchase orange juice, soda, or milk. This is not the case for oil, because there is no alternative to many of the products produced from petroleum.

Supply and Demand Despite the surge in biofuels and renewable energy sources, the majority of the transportation infrastructure in the U. Oil and gas is a commodity, which means there is a limited supply — and high demand.

Because oil is a non-renewable resource, in time, the supply of oil will reduce, and the demand for products made from petroleum will increase. This means that in the future, the price of oil is expected to rise. So, when everyone else is upset about high gas prices, oil and gas investors are thrilled because it means their oil investment is up.

Advantages There are significant tax benefits investing in oil and gas — specifically to owning a producing oil and gas well. A few of the tax benefits are: The structure of the oil and gas investment will dictate the amount of tax benefit. Tax breaks based on passive income Apart from the tax write-offs, investing in oil and gas provides diversification of your portfolio, and can be seen as a hedge against inflation. Additionally, certain oil and gas investment types can provide consistent cash flow, similar to real estate.

One good well can pay you for passive income decades and produce exponential returns. Disadvantages Despite all the wonderful pros of investing in oil and gas, it is important to take note of some of the cons. Since oil is a global commodity with many other countries also producing it, global tensions can directly affect its price. This could directly affect any cashflow producing investments because your cash flow is directly tied to the price of oil and gas.

Another disadvantage: depending on the type of oil investment and size of the project, it can be a big barrier to entry financially; it can cost hundreds of thousands to millions of dollars to drill a single well. Also, there is an environmental factor: there is potential for large liability issues if there is a spill caused by one of your oil and gas wells. With these investment options, there are no minimums on the investment size.

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The way the vast majority of oil and gas investment deals are traditionally structured leaves limited running room scalability and little diversification. If something goes wrong, few alternatives are available to correct the problem without pouring more money into a literal hole in the ground. In these instances, it becomes nearly impossible for the investors to recoup their investment. In , I changed the business model for my company to one that instead of acquiring one location, drilling and hoping for the best, we purchase large volumes of oil and gas mineral acreage, develop the asset by drilling wells, and divest of the project with the investors participating in the entire process.

By implementing this new strategy, without being required to drill all the wells, projects can be completed faster. You can invest as much or as little amount of money as you please. Investing in oil and gas company stocks works like investing in any other publicly-traded company. One advantage of going this route is you can capitalize on the oil and gas companies which payout dividends to shareholders. Oil and energy mutual funds are exclusively comprised of companies related to the oil and energy sector.

These funds by nature are less risky than individual stocks and also provide good exposure to the energy sector. ETFs also do not give dividends like many of the individual stocks. It is a type of investment that allows the investor to gain the benefits of the cash flow and tax advantages for the investment.

You have all the advantages of owning a percentage of an oil company without having to set-up the company, manage the day to day operations or be an expert in the oil and gas space. This is when an operating company structures a deal to explore a new area for oil. Usually, new wells are drilled in areas that have no previous activity or drilling. Normally an operating company is looking to drill more wells in an already proven area.

These types of drilling programs are usually chosen by investors who want an immediate tax write-off against income in the same year. Based on steady or increasing oil prices, this type of investment can also yield a steady cash flow. Working Interest Program This is a program where the developmental wells have already been drilled and are already producing. Usually, other working interest owners are looking to cash out and sell their interest to another investor.

This is similar to buying real estate that is already generating a rental income. There are no major tax advantages with this type of investment, apart from the depreciation allowed on the assets. Rework Program Re-work programs are not as common.