INVESTMENT STRATEGY: WORKING INTEREST INVESTMENTS
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MAKING A WORKING INTEREST INVESTMENT IN THE OIL AND GAS SECTOR HAS ITS ADVANTAGES. DERRECK LONG The Advantage of Working Interest Investments
and gas assets can have a long lifespan, with some fields remaining productive for decades. This can provide investors with the opportunity to generate long-term passive income from their investments. ALWAYS SEEK EXPERT ADVICE Eckard Enterprises works with high- net-worth investors and investment companies to build and protect their portfolios through diversified alternative investments. Working interest investments make sense for some investors, but not for others. Contact us today for expert advice regarding your portfolio. •
M ost investors understand the value of diversifying their port- folios. Alongside traditional investments, there are some alternative investment options worth considering. One of those is a working interest investment. Making a working interest investment in the oil and gas sector can offer several
variation to an investment portfolio. Because the performance of oil and gas assets may be less correlated with other more traditional asset classes such as stocks and bonds, this can help to reduce a portfolio’s overall risk and increase the likelihood of steady returns over the long term.
PROFESSIONAL MANAGEMENT
potential advantages to investors who are not averse to some risk.
Many working interest investments are man- aged by professional oil and gas companies, which can provide those invested in working interest with the expertise and resources that are fundamental to identifying and developing promising oil and gas assets. These companies typically have a team or teams of geologists, engineers, and other professionals with the knowledge and experience needed to evaluate the potential of an oil or gas asset and determine the best method to extract and produce its reserves.
DERRECK LONG
POTENTIAL FOR HIGH RETURNS
Oil and gas investments can potentially generate high returns for investors, especially if the underlying assets are successful in finding and producing oil or gas. These returns can come from the sale of the oil or gas as well as any profits generated from the operation of the assets. The value of an oil or gas asset is generally based on the amount of recoverable reserves it contains, as well as the cost of extracting and producing those reserves. If an asset is successful in finding and producing a large quantity of oil or gas at a low cost, it can potentially generate substantial returns for investors. DIVERSIFICATION While this one might seem rather obvious, it is still worth stating that investing in working interest can provide some strategic
Derreck Long is a senior wealth manager at Eckard Enterprises. He served in the military from 2010 to 2014 and then attended college at Northern Arizona University, where he received a degree in global marketing. After graduating college, Long worked with the FBI, but then started researching how to become an investor. He started experimenting in notes and has been a private lender ever since. Long has experience with a broad range of notes, including equity appreciation, second- lien notes to the traditional first-lien and mineral rights in the oil and gas space. Long is active on Think Realty's Government Relations Committee, where he researches tax code and new bill/law changes at the congressional level.
POTENTIAL FOR PASSIVE INCOME
Just like investing in mineral rights, working interest investments can generate passive income for investors because the assets are typically operated by professional oil and gas companies. This can allow investors to earn a steady stream of income without the need to be actively involved in the day-to-day management of the assets. Oil
24 | think realty magazine :: march – april 2024
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