Investing in an oil well may be a very lucrative option for your corporation to consider. Independent oil companies continue to expand their production fields and explore new areas to start drilling with the hopes of finding huge underground reservoirs of crude oil which opens many new opportunities for wealthy individuals and corporations to invest in the business of oil exploration. You may be interested in a single well for the unique opportunities it provides, or might considering adding multiple wells to flesh out an investment portfolio.
Intangible costs of drilling
There are numerous costs involved before a well can be set up for collection. The ground needs to be surveyed and cleared, drainage needs to be put in place, worker’s wages need to be discussed, general supplies need to be obtained and repairs need to be able to be completed as needed. These costs are known as intangible drilling costs or IDC. As an investor and taxpayer, you are able to receive deductions on every dollar in IDC you provide on your taxes in the year it was paid.
Is it worth investing in oil drilling?
For educated investors who understand the risks and benefits, yes it can be very worthwhile. Not only are there tax benefits for investors of the oil industry which cannot be found in any other industry, there is the potential of a steady revenue gain which can easily exceed your initial investment in a very short time. Even if you don’t strike it rich immediately, your investment will start offering its return in as little as 100 days from the time the drill is up and running. Not to mention, as an investor you also earn a spot on the Joint Venture panel allowing you to help make decisions regarding your well.
Buy stocks or invest in the exploration and drilling?
There are risks and benefits to either option which you will have to understand and research before making a decision. Stocks and shares can change often depending on the supply and demand of oil at any given time; this means you need to keep up to date on all market changes across several companies to get the best return on your initial investment. Drills on the other hand can continue to produce a return on your investment for an extended period and may quickly return much more than you invested depending on how large the underground oil table is.
Interested in learning more about intangible drilling costs? Contact Oil Boom USA for more information.
