How to Invest in Gas
Many companies involved in oil extraction also include natural gas extraction operations. Investing in natural gas wells and natural gas extraction can be just as profitable as investing in oil if you know the right approach. Whether you’re already in the oil industry or are interested in investing in hydrocarbon fuel sources in general, here is some of the essential information you need to know about natural gas investments.
Why Invest in Gas?
There is a common misconception that traditional fuel sources like oil and natural gas are becoming less in demand. The fact is that these hydrocarbon fuels continue to be some of the most efficient, reliable energy sources. In fact, natural gas generates sufficient electricity to power well over 100 million homes a year, and the average American home continues to use about 920-kilowatt hours of energy every month.
It is true that coal as a fossil fuel has fallen out of favor to some extent, but that has only increased the demand for the other primary fuel sources in this category, oil and natural gas. It is very easy to see how having a stake in the natural gas industry could prove extremely lucrative for any investor. But how do you get started?
How Do I Invest in Gas?
Well, one way to get involved would be to buy gas wells directly — or to buy land known to have natural gas, then rent or purchase the equipment to get to it. The advantage to this approach is that you do not have other entities taking chunks out of your profit margin all along the supply chain.
However, there are also many potential downsides, such as the risk of purchasing land that does not prove as rich in gas reserves as you may have been lead to believe, the cost of maintaining drilling equipment and paying extraction professionals and the headaches of dealing with those other entities in the supply chain.
Another approach is to invest in an existing natural gas extraction company. While you will only enjoy a percentage of the profits, you will have little to none of the headaches, and there may be many more profit streams to take advantage of. A gas extraction company may also produce and sell oil. They may offer extraction services, selling or renting equipment to companies with existing gas and oil fields or helping set up or manage gas extraction from their property.
The number of different ways to explore opportunities in natural gas investment is numerous, and there is sure to be one that fits you, your investment group or your business’ needs for investment in the energy sector. Viper Capital Partners in Texas can help you find the right natural gas investment. To find out more, please contact us today.