Why Evaluating Oil and Gas Investments Take Time

Oil & Gas Investments Take Time

When you’re thinking about making an oil and gas investment, you owe it to yourself to take as much time as you possibly can evaluating it. Mineral rights investing can be extremely complex and there are many different risk factors associated with it. When you have a full appreciation for these risks and why such a high level of technical, geological, economic and mechanical analysis is required, you’ll understand why these investments take time before making a deal. And even with all the risks, a well thought out and executed deal could make your decision to buy oil and gas minerals a good one for years to come.

Minerals Under Production Have Higher Value

Some of the main risk factors you can’t overlook with mineral rights investing include:

  • When you’re drilling deep into the earth, precision and accuracy are critical. One minor misstep can lead to tough consequences, and even the most experienced experts can make mistakes. Nevertheless, the mineral owner is not burdened with any exploration or production expenses. This only relates to mineral owners from the standpoint of reduced and/or delayed revenue streams.
  • People risk. You must do your due diligence on the people you’re working with regarding mineral rights investing. Working with people of high character is the first thing to look at with these types of deals.
  • Evaluating the size of the reservoir is critical for maximizing your investment, since the size can vary drastically. Knowing what’s beneath the surface will allow you to better negotiate your mineral rights with an oil company interested in exploring and producing your oil and gas minerals.

Prices. The price of oil and gas is something you can’t control, so this is always a risky component to consider. We talk about pricing oil and gas minerals in a Q&A session that provide additional details about the complexity of pricing.

Thorough Due Diligence Is A Requirement

When you make the decision to buy oil and gas minerals, a good deal for someone else may not be the best deal for you. Risk tolerance is one of the main factors to consider, and you must do a thorough evaluation of the company you’re working with on the project. Plenty of mineral rights investing deals have gone sour, and most of the time it’s because the investor did not spend the appropriate amount of time evaluating and analyzing every aspect. At Eckard Land and Acquisition, we evaluate each and every mineral property to reduce common risks associated with acquiring mineral rights, all for the benefit of our investors and partners.

Rely On The Experts

In most cases, the successful mineral rights investing deals have come when the investor relies on third-party experts for advice. These experts know everything there is to know about oil and gas mineral interest, including current trends, short-term and long-term impacts, potential cash flow and much more. When you’re thinking about making investments of this size, you can never have too many expert opinions.

Eckard Land and Acquisition is always available to help you with your mineral rights investing questions. We work with both individual investors and investment companies to ensure they make the best deals for their particular situation. In addition, we partner with industry experts like geologists, engineers and landmen to validate our decisions. Our goal is to maximize every deal we work with, based on the risk tolerance of the investor. To learn more about how we can help you evaluate your oil and gas investment, contact us today.