The Shale Oil Revolution: Boon To Millions Of Ordinary Investors

The Shale Oil Revolution: Boon To Millions Of Ordinary Investors

Just as the revolution in shale oil production has jump-started U.S. energy markets and garnered huge profits for the large oil producers, it also has the potential to make millions of ordinary Americans rich. People may well ask how that’s possible. The secret, as with traditional oil and gas production, lies in negotiating mineral rights.

As readers are no doubt aware, property owners have clear title to underground mineral rights if they were paying attention to the terms of the purchase agreement and made sure to have those included in the sale. What this means is fairly straightforward: any minerals or other extractable natural resources on the property belong to the property owner, and companies that would drill or mine there must pay royalty fees for extraction. This economic fact is such big business that some universities offer classes for landowners teaching how to negotiate and manage such rights. Having a monthly royalty check from an oil and gas producer can bring in a rich income for as long as the well on the property produces. This can last up to thirty years on any given property. The value of such royalty checks paid to landowners amounted to $15.3 billion just in the year 2013.

However, being a landowner is no longer the only way private individuals can make money off of energy production. Any smart investor can cash in on these profits can, of course, buy shares of energy company stocks such as ExxonMobil (NYSE:XOM). A second option is to invest in either sector-index or exchange-traded funds. These ETFs are essentially a portfolio of energy stocks from multiple companies that are index linked to a particular market sector as a whole. As long as that sector is performing well, investors yield dividends regardless of whether any one company is up or down for the quarter.

Energy producion profits are growing thanks to technological innovations that have made shale oil extraction economical. Therefore, it only makes sense for ordinary Americans to find their own pathway to profit and economic security through the market. And since the opportunities are open in ways that have never been available before, consulting an investment advisor is the wisest decision one can make. Have a broker outline how energy investments through the stock market, as well as in drilling and mineral rights, can work for you.

Comments are closed.