Investing in gas and oil offered by the top gas and oil firms is a surefire method to beat the stock market. It must be done properly and only with the best company.
The company you choose to invest must be successful and have knowledge of the risks associated with oil and gas drilling.
They must know how to handle and manage these risks, have the best technology, recruit the best contractors and drilling companies, and be able to do well in all market conditions. By investing in companies that consistently perform well, you minimize risk.
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There are many areas of concern when investing in oil and gas companies. Beware of rapid estimates of cash flow distribution from newly drilled wells. It takes at least 90 days to start receiving income from new development activities.
New wells require adjustments and purchase contracts need to be negotiated, especially when drilling onshore or offshore wells that have large commercial reserves. This process usually takes between 6-12 months for cash flow to actually begin.
Large companies want to build long-term cash flow rather than shallow wells with short-lived production, something to keep in mind when considering an investment.
Successful companies do not have wells with rapidly depleting reservoirs, they want to maintain revenue streams for longer periods of time.