Understand The Benefits and Risks Associated With Oil and Gas Investment

People who are planning to invest in oil and gas should understand that there are several ways by which one can invest in oil and gas. Financing can provide the chance for large returns and much preferred tax benefits for certain types of investing. Public and the private are the two types of methods by which one can invest in an oil and gas. Purchasing stock in an oil and gas company is considered public while investing through direct participation programs is known as private. While public investment include lower risk but they also provide lower returns. On the other hand, private investment offers investors a proprietorship status in a well and a part of the income it produces.

JBH Consulting Group is a privately owned oil and gas company based in Kansas City, Missouri, United States. The company provides oil and gas investment opportunities through direct participation programs. The benefit of this is that you get the profits of being a landlord without having to set up a company or turn out to be an oil expert, which is the role executed by the programs sponsor. It allows the investor to receive revenue, as well as tax benefits.

By investing in oil and gas one can get the following benefits:

  • It can act as a threshold against rising prices. Like when the prices of petroleum are high and the individual is paying more at the gas stations then this can be counterbalanced by the revenues that one gets from an investment in oil and gas.
  • It can add variation to their complete holdings. Although variation does not promise against loss, it is a key strategy used in financial planning to extent risk. The aim is to make savings in a number of different asset classes, each with their unique risk reward characteristics, so that when one asset class is out of service the other(s) will not be directly connected and still maintain growth prospective.
  • It offers a vast range of tax benefits for the investors.

JBH Consulting Group has been founded by Brian Hudnall in the year 2007 who states that as every investment involves risk, the same thing also applies in case of oil and gas investment. Some of the potential risks are listed below:

  • Drilling issues can occur such as dry hole or uneconomic hole, or delays due to weather. Drilling programs in proven fields or next to producing wells are considered less risky than experimental programs. JBH opts for development programs as here the drilling programs take place in proven fields.
  • Oil and gas investments can be volatile or unstable as the price can be affected by various political, economic and weather related issues.
  • Oil and gas are draining assets and a typical lifespan of an oil well can be twenty to thirty years.

However, JBH Consulting Group minimizes the potential risk involved by providing developmental oil and gas investment opportunities to the clients. The professional geologist, engineers, and oil and gas operators work together in order to offer the best possible benefit to the investors.


Categorized as Finance

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