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Oil and Gas Royalties |
If you are
interested in buying oil and gas royalty interests, then you will be pleased to know that this certainly is the
right time. The prices of mineral commodities such as oil are expected to rise
hence, it can be considered the best and the safest option to invest in. You
can approach the decision to invest in gas and oil in a spectrum of ways but
the difficult part would be to determine whether which one would fit the bill
perfectly?
Here are a
few guidelines that you might want to consider when buying oil and gas royalties interests:
·
Gas and oil investors should decide initially whether
they should invest in a mutual fund, which is meant for investing in energy
instead of a direct form of investment or UIT. The latter route is considered
less risky but also offers paybacks that are ominously lower. In contrast, the
former is actually riskier but with greater paybacks and an entire range of
unique tax incentives not available anywhere else, the decision is tough.
·
If while buying
oil and gas royalty interests, direct participation is favored, then you
will have to decide whether you will follow working interest partnership or a
royalty arrangement. Obviously, mineral royalties are payable to landowners and
if you wish to walk on this path, do consult a real estate agent for purchasing
land, which has oil wells.
·
In case, you decide to make gas and oil investments
directly, even without keeping the land, then the single most important thing
you will have to decide on will be that if you would plan to own shares in
partnership else acquire complete or part interest of the said oil project.
·
Now, if the decision has been made to make an
investment on an opportunity that is a partnership-based investment, then you
may be asked to prove whether you are an actual accredited investor. This, in
real terms, means, that your income should touch the 250,000 dollars-a-year
mark or you have a net worth close to one million dollars. At the end of the
year, you will be mailed a K-1 form that will clearly outline your share as a
partner in the income as well as expenses.
·
If you are planning to invest in a project based on
working interest then you should know this that any returns you receive will
become your earned emolument. Therefore, you are required to leave out
self-employment tax.
·
Working interest investments generally involve the
collaboration of a geologist with your decision who will rework or drill on the
project to make the investment profitable.
·
When oil
and gas royalty interests via a working interest arrangement, one thing you
must be careful about is that these kinds of investments are not directly regulated
by the SEC.
·
You should also be aware that many projects related to
gas and oil investments are not publicized. Therefore, consultation with a
petroleum engineer for figuring out if something is possible or not, is
important.
You need to
follow this pattern before oil
and gas royalties interests and you will be able to get guaranteed high
returns with your investment.
Uni
Royalties Ltd. is a petroleum management firm that has a wealth of experience
in the oil and gas industry. We carry out effective assessments of your land
and are able to match those with a deal, which you will not be able to reject.
We deal in all kinds of mineral royalties, lease of royalties and can assist
you in scoring an experienced agent for further dealings. Visit https://royaltypurchaser11.wordpress.com