Oil And Gas Lease

Getting associated with the ownership of minerals underneath the ground will be the domain of oil and gas royalty interest programs or deals. These kinds of deals involve receiving a portion of the proceeds from extraction of natural resources like oil and gas. You can find some limitations concerning such investment opportunities but there is also the prospect of big payouts.

Several of the advantages of owning an oil and gas interest run the gamut as well as in general are less riskier than owning an actual well. Owning a well introduces a host of problems including messy liability issues as well as major expenditures for production.

Owning interests in oil and gas will remain in perpetuity. This means however the working interest of a particular well may change hands several times, the interest of the royalty holder will remain intact throughout these changes.

Holding oil or gas royalty interests has the added benefit of no liability issues. Liability issues may be between the working interest and the government or between the subcontractors as well as the operators of the well itself. You will find environmental liabilities that must be considered, property damage, injury, and of course common liability problems with debtors and also a company going under. Liens held against the operations of the well can also occur which places people with working interest at a disadvantage if you can find injuries or a lawsuit is brought again the company producing the resource.

Another benefit is the fact that there are actually no extra costs connected with owning an oil and gas interest. The working interest is the sole responsible party in all of the of the operational costs for the well. This may include metering, plugging, pumping, up to and including abandonment.

Luck as in most investments in life can also play a big part. However not actively involved with the production, sometimes more wells will be drilled on the exact same lease which means that the owners of the oil or gas interest will take advantage of the extra sales following production from the new wells. All again without the operational cost.

Unlike in real-estate as well as other types of investment, no capital calls are allowed. Those holding interest in oil or gas will not have to be concerned about requests for payment because those interest holders are divorced from the particular operation Acquisition of Mineral and Leasehold Rights the well for example drilling.