The best accredited investor opportunities often include tax-advantaged investments. One of which is oil well investing. The U.S. is quickly growing into an oil powerhouse, with the country expected to overtake Russia as the world’s largest oil producer by 2019. The growth in Texas crude oil production volume is almost single-handedly driving this growth.
There’s never been a better time for accredited investors to invest in Texas oil wells. Well, other than say 1901 when the first Texas oil boom started with the Spindletop oil field. But as the Chinese proverb goes, "The best time to plant a tree was 20 years ago. The second best time is now."
The U.S. Becomes Oil Powerhouse
We’re now seeing a steady growth in oil production volume coming out of Texas following the mini-oil price crash from 2014. The road back to $100 a barrel oil may well be shorter than expected.
Oil prices are now at the highest levels since that crash a few years ago. There are a few things working in oil’s favor here. First, renewed geopolitical worries from overseas are lifting oil prices as buyers get worried that supply could be hampered if there is upheaval in major oil producing countries like Saudi Arabia. As well, potential U.S. withdrawal from the Iran nuclear deal could lead to renewed sanctions on the major oil exporter.
Meanwhile, the U.S. is still going strong when it comes to oil production. There’s virtually no geopolitical risk and there’s a lot of oil still in the ground, especially in Texas. So the U.S. is poised to pick up the slack as other countries see a decrease in oil production.
Texas Oil Production Volume Stronger Than Ever
For accredited investors, Texas oil wells continue to be an enticing way to invest large sums of money. And not just because of the tax breaks that oil wells provide. Next month is expected to bring another consecutive month of rising U.S. oil production and Texas is leading the way.
The U.S. Energy Information Administration, the authority when it comes to energy production in the U.S., says that record production is being driven by growth in the Permian Basin in Texas. Digging into the numbers, this could be an understatement.
Oil Plays In Texas
The Permian, which covers most of west Texas, is the largest oil play in Texas, but more importantly, it’s the largest in the U.S. The oil production coming from the basin is nearly 3.2 million barrels per day. That’s the most oil coming from the Permian since they started keeping records in 2007.
Then there’s the second largest shale play in the U.S., which is also in Texas. The Eagle Ford shale, covering southern and parts of eastern Texas, is currently producing over 1.3 million barrels a day.
Texas oil is huge. For context, total U.S. oil production is running at about 7 million barrels per day, and just these two Texas shales are generating nearly 65% of the entire country’s output.
Texas is the top oil-producing state in the country and has been for years. There are oil fields spread across the entire state and with its abundance of sunny days, there are no drilling bottlenecks related to adverse weather, like you might find in in the Bakken Shale up in North Dakota.
Reserve wise, there’s still plenty of oil well opportunities within Texas. Texas has nearly 13 billion barrels of oil reserves, which is the amount of oil that’s estimated to still be in the ground and about 40% of the entire reserves in the U.S.
Texas’ stat sheet when it comes to oil production volume speaks for itself.
The investor opportunities in today’s markets are a bit limited given the all-time highs of the stock market. For accredited investors, investing in Texas oil wells is still very interesting. Oil wells are tax-advantaged investments that provide ways to tax shelter income while offering exposure to one of the best oil markets in the world.
Oil and Gas Investment Opportunities
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