Oil and Gas Partnerships: A Proven Success
Oil and Gas Partnerships: A Proven Success
Strong partnerships are important when investing in the oil and gas industry. Since you cannot invest directly into an oil well, being a member of an “investment club” or entering into an investment partnership is the ideal solution.
The MANY Advantages of Investment Partnerships:
- You’ll find the RIGHT opportunity to invest in.
- Diversify your energy portfolio.
- Reduce your tax liabilities.
- Get higher return on your investment income.
- Discover (and share) best practices for maximum gains.
- Amplify your project’s value by learning about leading technologies and innovations.
- Expand and profit from any new frontiers in oil and gas.
Why Limited Partnerships Could Be Right For You:
Limited partnerships provide an ideal way for investors to get their feet wet without having to purchase expensive stocks from established gorillas like Chevron and Exxon Mobil.
A limited partnership is a business structure formed by a group of co-owners who pool their capital, resources and knowledge in order to invest in larger portfolios.
Investors would enter a partnership agreement that allows one or more limited partners to invest in a company’s cash assets. In other words, the group finds and contributes to a variety of businesses that purchase or lease real estate in order to locate, extract and sell commercial oil and gas.
In Canada, limited partnerships in the oil and gas industry provide a substantial federal tax shelter, and in some cases additional provincial tax breaks. The advantages of a limited partnership include: 100% tax write-offs, a low minimum investment of $2,500, and decreased risk because you are only liable for the amount you’ve contributed.
Keep in mind, that there are tax implications when you redeem, so it’s best to seek advice from a qualified tax professional regarding the best timing and strategy.
Furthermore, when investing in the right oil and gas company, limited partnerships increase the likelihood of higher returns. The odds of seeing a substantial pay-out with a small oil and gas company is much higher than what stocks might offer.
Where do you begin?
Unfortunately, the number of limited partnerships available to Canadian investors is limited. For this reason, it’s important to find a limited partnership with an established track record.
There are organizations available that will play “matchmaker” and help you establish potential partnerships with oil and gas companies.
Commonly referred to as an Oil and Gas coach, these matchmakers provide many key benefits.
Oil and gas coaches will bring together resource-holders and investors. They will look at current portfolios and suggest beneficial investment partnerships.
As industry experts, oil and gas coaches help to transfer knowledge, information, and technology to a large global network of investors. They help innovators, researchers and governments maximize the value of their energy resources and help support inward trade.
Collaboration is the First Step to Success!
The new Australian Innovation Partnerships is a fine example of how this collaboration works.
Australia has a federal labour plan designed to increase jobs, expand growth and become more productive and competitive in the global marketplace. They describe their partnership as a network of 35 businesses and research institutes, all backed by government.
The partnership consists of fortune 500 companies like Woodside, Shell and Santos (who do business on a large global scale) as well as universities and research facilities (like Western Australian Energy Research Alliance) and a mixture of small and medium sized enterprises.
Together, this dynamic partnership forms a large network of knowledge, skills and resources that can dramatically affect future growth. They continue to develop leading strategies to improve workforce skills and productivity, encourage innovation, and increase distribution and marketing channels in order to see larger global penetration and more international investment.
When limited partnerships are executed correctly, investing in oil and gas can be a profitable option, worth consideration.
