1031 Oil and Gas: Investment Analysis of Oil and Gas Properties
Energy investors have been enjoying the benefits of private ownership and 1031 "like-kind" exchanges for over 60 years. Private ownership results in Direct Assignment of Leasehold Interest; investors receive legal title to the percentage of the working interest purchased. As such, it provides an attractive 1031 Exchange opportunity for individuals and companies looking to reinvest capital from recent investment real estate sales. Oil & gas also represents an opportunity for TIC investors seeking a passive vehicle similar to a triple-net commercial property.
Private O&G ownership offers many benefits to the sophisticated real estate investor. It is an alternative that provides the same or better cash flow than many other forms of real estate, is not at the mercy of the broader economy and, thanks to an active auction market, provides flexible liquidity options. Furthermore, royalty ownership provides an excellent hedge against the impact of sustained high or rising energy prices on other asset classes.
1031 Oil & Gas Ownership Benefits
* Increased Monthly Cash Flow: Energy investments have historically generated annual income of 10-15%+.
* Diversification: Oil and gas assets consist of ownership in hundreds and often thousands of producing wells, on hundreds or thousands of acres of land in multiple oil and gas regions in the United States.
* Management Free An experienced operator will have the organization, professionals, and systems in place to properly analyze and operate the investment.
* Reduced Exposure to Real Estate: and gas can help reduce many 1031 exchange investors exposure to real estate.
* Flexible Liquidity Options: Each year, hundreds of millions of dollars of oil and gas interests are bought and sold through online auctions, third party divestment companies, and private sales.
* Investment Portfolio Hedge: Oil and gas ownership provides a hedge against the impact of sustained high or rising energy prices on other asset classes.
* Investment Size Flexibility: Exact dollar matching with investments starting as low as $200,000.
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