Oil and Gas an Investment - Always in Demand

You can’t go wrong with oil. Yes, it’s true that oil and gas investments are always in demand. You only have to count the top performing global companies to realize this. But how do you invest in oil? There are several ways to make sound oil investments. One way is to invest in a large public owned oil company. Another option is to invest in mutual funds dealing in the oil sector. A third option is to invest in oil as a commodity. And another option is to invest in a private project.

The public companies will give you a steady 10% annual return whereas a private project might give you as high as 50% return. If you can take risks, an even higher yield is possible by participating directly in independent companies prospecting for oil. Oil and gas investments have brought in profit for many, its time you make a try.

Essentials of Buying Mineral Rights

Buying mineral rights is simpler than buying property - provided you have no interest beyond just acquiring mineral rights to the property. However, in any case it’s a good idea to get a geological survey done to assess the best property for exploitation.

Confirm the right of ownership of both the property and the mineral rights. Consulting an attorney proficient in oil and gas laws would be helpful. Thereafter you have to draw up a lease, which will give you the mineral rights. A payment is involved and there is a term of lease by which time production should have commenced. Both of these should be negotiated in your favor.

The property owner would have to be paid oil gas royalties generally defined by the state. The royalty should be negotiated in your favor. The property owner will also ask for indemnity towards protection of his property.

Oil And Gas Royalty Buy – A Brief About The Essentials

Buying mineral rights from the property owner with the intention of benefiting from future raise in oil, gas or mineral price is a well-established practice. The steps that should be taken care of before making a call on oil and gas royalty buying opportunity are:

* Check out the property generally to ascertain fitness for commercial exploitation.

* Check the property ownership status.

* Involve an attorney conversant with oil and gas laws of your state.

* At the negotiation stage, hard bargaining is must since you at best can make only an assessment regarding the commercial viability of the property.

* A lease has to be drawn up which gives you the right to conduct exploitation of the property. Since the duration of the lease is for a fixed period, you have to complete your assessment and start production before the lease lapses.

* You have to pay the property owner a share from your income known as royalty. These oil gas royalties are often fixed by the state.