Investing in commodity stocks or ETFs is a great way to make capital gains and/or diversify your overall investment portfolio. Not only can your portfolio exponentially grow in the long term with these types of investments, but you can also add income (i.e. cash flow) from your investments that can be used to reinvest in more stocks and ETFs, or used at your own discretion. If you’re looking to diversify your overall portfolio even further, you could decide to invest directly in oil and gas wells.
Oil/Gas wells are basically reservoirs deep under the Earth’s surface (like, several thousand feet), that require huge investments from gas exploration companies in order to extract the commodity via drilling, from the Earth. Because of these required initial investments, gas exploration companies will seek out investors who have enough capital to pool together and fund this opportunity to bring the commodity to the consumer. The benefits of investing in gas wells are that not only do you receive profits based on the productivity of the well, but you also receive tax benefits because you also share in the costs and expenses of the well. So in this introductory article, we’d like to mention a few of those hard working companies for potential investments.
Investing in Oil or Gas Royalty Stocks generally requires that you are an “accredited investor” and have the income or net worth to justify such a risky investment for your portfolio. So please consider the risks involved or meet with your financial advisor and determine whether or not these investments fit into your profile, because there are several wells that do not produce any or as much gas as initially planned…and this is money forever lost. There is no guarantee on whether or not a well will return profits back to the investor…so keep this in mind before investing. IF this is an investment you’d like to add to your portfolio, please see the names of the Top 5 gas exploration companies below and contact them directly for information on how to invest because the returns can be significant.
Now, if these investments are something you can’t participate directly in because of your non-accredited investor status (according to the SEC’s definition), then you’re not out of luck. Because there is still a way to invest in the stocks of these exploration companies, where you still are able to share in the costs/expenses and profits of the company. These stocks are listed below:
- BPT - BP Prudhoe Bay Royalty Trust
- BBEP - BreitBurn Energy Partners L.P.
- FRU - Freehold Royalties Ltd
- SBR - Sabine Royalty Trust
- CRT - Cross Timbers Royalty Trust
NGSReport does not own, has not previously owned, nor intends to own any of the aforementioned stocks within the next 72 hours with the exception of BBEP. We have owned BBEP since 2012.