According to data sourced at this article, 12 million Americans were making money through royalty checks from oil and gas wells in 2014. This followed the boom in the fracking industry that made the U.S. one of the world’s top oil producers and its number one gas-producing nation. The riches have flowed down from big oil and gas corporations to the bank accounts of many average citizens who have made wise investments. The following are some of the ways people are profiting from the oil and gas industry.
For one thing, people who own land in an oilfield can lease the land to oil companies for drilling and exploration. In some states, land and drilling rights are leased separately, opening up another way for people to make money. In some cases, individuals have checked into court records and started earning royalty checks on inherited land or drilling rights on land they didn’t even realize they had a claim to.
Owning A Well
Another way to make money in oil and gas is to have full or part ownership of an oil well. Thanks to a 2012 increase in the number of shares a corporation can sell before going public, it is easier than ever for everyday investors to purchase shares in a well. Since the owner or owners of a well actually own the oil that comes out of it, they receive a profit from the sale of the oil. This is a profit stream that can last anywhere from ten to thirty years.
There are three ways to invest in the oil and gas industry through the stock market. First of all, investors can buy stock in major energy companies like ExxonMobil. Two other options are buying into index funds and exchange-traded funds, both of which are groups of stocks that aim to follow the whole sector. These options give investors a little more diversity in their portfolios than buying individual stocks.
No matter how people choose to invest in oil and gas, they can be optimistic about long-term outcomes. Experts in the energy sector predict that gas and oil prices will only go up as worldwide demand increases.