Wednesday, April 30, 2008

The Beginner's Guide to Oil and Gas Investing

For my term paper, I wrote an oil and gas investor's guide geared towards the beginning investor. I thought it would be interesting to inform people on the options available for someone wanting to put money into the oil patch.

It starts by giving background on oil and gas basics, such as petroleum geology, leasing mineral rights, and drilling and producing oil. I felt that an introduction to these concepts and terms would be important so the investor would be able to hold an intelligent conversation with the operations people.

It then goes on to discuss the different types of financing vehicles available, such as energy sector funds, individual stocks, drilling, completion, royalty, and lease acquisistion funds. It then goes on to discuss common financing structures for direct participation such as "third for a quarter" and "an eighth back".

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