« Journalist’s Fierce Intelligence and Searing Wit Bring Humor and Humanity Into His Tragic Account of the War in Iraq | Main | Petrol Oil and Gas Announces Record Second Quarter Results »

August 17, 2021

Exchange Your View on Oil & Gas Private Placements Author: Christopher E. Pippin, V.P., Striker Petroleum LLC

Both near-term conditions and long-term supply-demand projections make the economics of oil and gas private placement programs very appealing–especially for investors seeking real property diversification through the 1031 Exchange.

(PRWEB) August 17, 2021 -- The price of oil is breaking records, gasoline prices are skyrocketing and energy investors are pocketing profits. Research and ratings from Morningstar puts the annualized return of natural resources funds at nearly 18% for the past three years, through April. However, despite the lucrative rewards to be reaped in today’s market, lingering fears of “losing it all” cloud many investors’ thinking.

Blame it on the 80s.
“A lot of investors went into these programs in the 1970s and 1980s and they got burned,” says Lewis Walker, a financial planner in Norcross, Ga. What appeared to be a great opportunity for big returns in energy investments turned out badly for many when oil prices fell below $10 in 1986.

Things have changed, though, since the last great oil boom. As unfortunate as the market collapse in the 80s was for some investors, industry analysts agree that this type of setback would not be likely or even possible in today’s world. Both near-term conditions and long-term supply-demand projections make the economics of oil and gas private placement programs very appealing – especially for investors seeking real property diversification through the 1031 Exchange.

With the emergence of oil and gas program sponsors into the 1031 Exchange arena, some of today’s private placement options offer an attractive, income-producing alternative to traditional real estate. Retirees and those nearing retirement age “want to know their investments will produce the income they need every year,” notes Larry Goff, executive vice president of CNL Securities Corp. Direct investments into oil and gas with the potential for higher returns, he says, “can help create a firm foundation for this kind of valued, ongoing income stream.”

What about risk?
While risk is a part of every investment, the nature of a 1031 private placement opportunity is on the low-end of the scale. Oil and gas replacement property precludes the dangers of drilling and wildcatting, the most risky of oil and gas endeavors. To qualify as “real property,” oil and gas replacement property must consist of actual ownership production from producing wells, either through overriding royalty ownership or working interest ownership. Private placements that account for the purchase of producing wells in multiple fields and formations with multiple Operators provide diversity of product–and further spread the risk.

The 80s Oil Bust left deep scars on many investors. But now, in an era of sharply increasing demand, limited product AND the ability to complete a 1031 Exchange for portfolio diversification and tax deferral, the rewards of oil and gas asset ownership may outweigh the risks.

About Christopher Pippin
Christopher Pippin has over seven years experience in the securities industry, with a concentration on alternative investments. Mr. Pippin became involved in oil and gas investing in November 2002 when he joined Mr. Mark Roberts of Striker Petroleum. Mr. Pippin has been instrumental in the growth of Striker Petroleum and focuses his efforts on building broker-dealer relationships throughout the United States.

Posted by Industrial-Manufacturing at August 17, 2021 03:39 AM

Comments