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Five Reasons to Invest in Specialty Oil and Gas Companies

In this world, you have choices for your investments. It is always a risk when you are putting your faith in others making money with your capital. However, some risks are worth the effort. For example, investing in specialty oil and gas companies might be the right move. The market for specialty gases is growing due to an increase in demand from Asian countries. The Energy Department predicts an 11 percent increase this year and more next year. Here are some reasons why you would want to invest in specialty gas companies.

 

  1. Income Potential — When you take a chance on special energy companies, you can see growth in returns even though you don’t take any aggressive actions. You also will see a strong return on your investment possibilities. Even though oil prices are low, buying into oil and gas can still be a great way to earn capital. As stated previously, the market for specialty products continues to grow. Demand is strong for liquified natural gas. The returns are growing faster than other market-based investments. Besides the market growth, the industry boasts Improved technology and a change to developmental, infield drilling in proven conventional fields and unconventional shale areas. They have addressed the issues and lowered the risk of investing. Better success rates and intelligent investment decisions will lead to long-term options for money.
  2. Short-Term Crashes — As a hard asset, you would be able to protect your portfolio against market fluctuations in the short term. Although you don’t want to have a single investment strategy, exploration and production-based energy investments offer higher returns than other options. Specialty gas company investments have a low correlation with other asset types. It also shows positive protection against inflation. Therefore, to add diversity to your portfolio, oil, and gas is a good option for you. You wouldn’t have to worry about inflation or stock market crashes.
  3. Tax Breaks — The government wants people to invest in oil and gas production. In fact, you can get tax breaks from the Internal Revenue Service. For drilling program investments, you might be able to deduct 60 percent to 80 percent of the good costs in the first year as intangible drilling costs. Tangible costs may be depreciated over five to seven years. Also, 15 percent of a property’s gross cash flow is not taxable because of a depletion allowance. The IRS also gives you a 100 percent deduction allowance for property leases, sales expenses, legal, and accounting expenses. What other industry can you do that? 
  4. IRA Compatible — Oil and gas company investments are compatible with individual retirement accounts. That means that you could roll your IRA into the specialty gas investment you choose and not lose your investment. You would still get the benefits of an IRA even though you have switched to oil and gas. 
  5. Versatility — Specialty gases are used in so many ways that most people don’t realize. Unlike the versatility of natural gas, more than 70 percent of all the oil used is for transportation. About a third of natural gas consumed is used for electricity; another third goes to make petrochemicals, and a final third is used in homes for heating and cooking or in the commercial sector. Its versatility is why people are demanding natural gas and specialty gas more. Financial advisers expect it to grow more in the next few years. 
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