Hidden Profits in Investing in Oil Exploration and Production

If you’re from a non-Oil Industry background, understanding the schemes and plays of Oil Exploration and Production is beyond your knowledge. However, even with a basic understanding of it, you can harness handful profits. With Oil Industry booming with each passing year, investors will make better profits than the previous year which makes it a lucrative stock option.

Oil Exploration and Production

This is a vast field and is mostly covered by all oil organizations. Let’s approach this part by part. 

EXPLORATION – There are 2 types of Exploration- exploratory oil & gas wells and developmental oil & gas wells. Exploratory wells are when oil companies search for new and undiscovered wells and Developmental wells are when the oil companies digs on to the discovered ones. As you may have understood, exploratory is riskier than developmental. However, riskier business always gives you richer returns. But if you want to play safe with a steady income, developmental wells is the way to go. Investors should investigate properly as to where the company plans to drill oil and gas wells for hydrocarbons. If they specify the kind of oil well they plan to drill, their previous drilling explorations should be a good measure of their success rate in finding hydrocarbons.

PRODUCTION – Production includes average daily production rate, exit production ratings (Published in evening press releases), financial fillings and total production of the period. It is advisable for investors to smart investment by checking the above markers regularly before investing in the E&P stocks. It is understood that a positive incline in production rate without hike in debts and equity securities is the most advantageous stock to invest in. Checking the revenue generation on the basis of per barrel of oil equivalent (BOE) and period costings by measuring cash operating costs, general and administrative expenses, and depletion and depreciation expenses is also imperative. These measure the margin between cost and profit management.

There are several oil and gas drilling program for you to invest in. Make sure you’re making the right decision. Let our analysts help you understand it at http://www.oilandgaspostings.com/gas-drilling-programs .