Investing in oil and gas in the past has always been high risk/return with many conservative investors staying out of the sector altogether. With the huge rise in the price of oil over the last few years and only marginal increases in the cost of production, the risk factor seems to be diminishing while the returns are starting to multiply. Listed below are some of the benefits of investing in the oil and gas industry.


  • Drilling is the very best tax advantaged investment. (Newsweek)

  • Congress gives excellent tax breaks to individual investors.

  • 100% tax deductible ... Up to 84% can be written off in first year.

  • 15% Depletion allowance on Revenue.


  • Small drilling prospects are better than ever.

  • Consolidating small leases as individual operators opt out of the business.

  • Individual Investors have opportunity to invest in less expensive and less risky wells.


  • The big money has gone offshore and overseas, because there are too few easy-to-find big oil fields remaining.

  • Over 10,000 oil cos. have left the arena since 1982 when oil prices crashed.

  • Small companies can move rapidly to cease opportunity while large corporations are busy off shore.


  • Encourages domestic drilling with special tax breaks.

  • Mandating natural gas usage over oil and coal.

  • Natural gas is now deregulated.


  • Petroleum demand is doubling about every 10 years.

  • U.S. oil stock piles are at 27 year low. (14 days of domestic consumption)

  • China is the world's second-largest consumer of oil. It has about 20 million cars and trucks now. By 2020, that figure is expected to be 120 million.


  • US output is at a 36 year low

  • Over two-thirds of domestic oil wells are classified as marginal (avg.3 bpd)

  • Imports are now over 60% (imports were 30% just before oil embargo).


  • Long range projections are up. With a current price hovering at $100 per barrel.


  • Oil Prices are predicted to rise above $ 128 next year (

  • Prices are expected to remain firm for the next ten years.

  • No practical replacement for oil in the near future is seen.