With the global demand for oil and gas soaring at an all-time high, investments in energy continues to bring great returns to investors. However, if you are planning to invest in oil and gas for the first time, it is important to be aware of all critical aspects, with one of the key factors being the type of investment you choose. Continuing on the subject, this blog post provides a comparison between direct and indirect oil and gas investment options. Take a look.
Direct investments in oil and gas refers to purchasing equity in existing and upcoming projects, directly from a drilling company. As every direct investor becomes a shareholder in a particular project, they are entitled to receive a share of the profits it generates. Direct investments in oil and gas not only helps investors to diversify their portfolio, but also entails a potential steady cash flow. In addition, direct investors are eligible for substantial tax benefits on the investment, as provisioned by the US government.
Indirect investments mean buying equities of publicly traded companies involved in drilling and marketing of oil and gas. Energy-related mutual funds, ETFs, or oil futures are some of the ways through which investors can invest in oil commodities. This type of investment makes an ideal investment choice for individuals who do not qualify for the minimum requirements laid out for direct investments in oil and gas; which is an investor who has a total net worth of 1 million dollars, excluding home and cars, or has made over 200k per year for at least 2 years in a row.
Though every investment has its share of risks and benefits, direct investments in oil and gas have a higher potential to deliver sustainable returns compared to indirect investments, as it involves fewer administrative layers. It is, however, important for investors to partner with a trusted oil and gas investment company to help guide the way. That’s when they need a company such as Fig Tree Capital Ventures. With years of experience in the energy investment industry, our consultants are ideally placed to help you formulate an excellent investment strategy that could potentially generate long term monthly cash flows with you oil and gas investment. For details, simply call +1 214-999-1967 or fill out our contact form, and we will get back with you, shortly.