Probably most people haven't heard of it. I know I haven't. What companies sell this?
Modena nice... as mentioned above i hear it for the first time about this. i have never herd it and even though i don't have 16000 buck ill definietely look into it.. i was just curious does it apply only to wells or can it be applied to other industries. chahine
I agree with you on the not having 16,000 i will look into it... is it possible to maybe buy fractional shares or anything to get the same percent but just of a small number.
I can also say that I've never heard of this type of offer either. Sounds like your grandmother did some good investing! Can you do this for less than 16,000?
From my understanding, no, the minimum you can buy is 1%...basically the money goes into drilling and production. I will get some more information from my dad; after all, he is the petroleum guru here ;)
Might be tough to sell in a hurry too. I like to have my money liquid.
I just talked to my dad and here are some questions I asked him… How long does a well last? It can last 30 years to 50 years, depending on the life of the well…on average 25-30 years. You can also be bought out by another oil company. The wells production after 15 years will gradually decline. What is the minimum you can purchase? This depends on the deal that the oil company is offering, normally around 1%, but can sometimes be .5% or less. How much money can a well produce? A well can produce $0-$1,000,000 a month. My dad said an average of $150,000-$200,000 a month is about normal. What are the extra costs at the end of each month? Battery operating, maintenance, power, and government tax.
[quote:19f10d7688="FatFreddie"]Might be tough to sell in a hurry too. I like to have my money liquid.[/quote:19f10d7688] This is not a short term invesment, the income is consistent...once you make you're money back you never "lose" money.
This sounds interesting. But why not simply invest in that oil company's stock instead, of course there is risk involved, but you can pull out any time also. Good luck with your projects Modena! :D
[quote:a2fe60d8e8="dogfeet55"]This sounds interesting. But why not simply invest in that oil company's stock instead, of course there is risk involved, but you can pull out any time also. Good luck with your projects Modena! :D[/quote:a2fe60d8e8] They are two different things. In this case you are part owner of the well and whatever that well produces you get a 1% cut of it. Besides, if that well is making you $1,800 a month why would you want to sell?
I understand. I guess you would not want to sell a good well, but how long are these contracts, several years?
[quote:a7ad15e0a9="dogfeet55"]I understand. I guess you would not want to sell a good well, but how long are these contracts, several years?[/quote:a7ad15e0a9] Forever...
Say they run dry or no oil is found. What would happen then? Do you have to continue to pay for it?
[quote:7b6461bffd="Hathor"]Say they run dry or no oil is found. What would happen then? Do you have to continue to pay for it?[/quote:7b6461bffd] The obvious risk is hitting a dry well. If you do hit a dry well you lose you're money, there would be no reason for you to keep paying because there's nothing in production. The risk of hitting a dry well is slim, but it can happen!
That will be something to keep in mind. What is the initial investment up front then 16,000? What is a name of a company that offers this?
Lol, we should all try to get together and buy a percent....
hehe, i wouldnt mind putting in 1,000 or so
i wish i had the money i would buy couple of percents :cry: chahine