Several states within the continental USA produce oil, but the king of them all is Texas. They say everything is bigger in Texas, and apparently that’s true for the number of barrels they produce too. While the oil and gas industries are ever changing and still expanding, there are numerous other states just now being tapped for their oil potential including North Dakota, California, Utah and Colorado.
Where does it really come from?
Many people today believe that oil is the remains of dinosaurs and since some scientists still debate the original sources of oil this could potentially be at least somewhat true. However, the most commonly accepted belief is oil originates from a tiny single-celled organism known as a Diatom. As the diatoms died off, they became covered in layers of sediment which created both heat and pressure to cause a chemical reaction well underground. This is, arguably, the original source of the oil we drill today. That would also explain why drills need to go through thousands of feet of earth and core samples show dozens of unique layers.
Should a corporation consider investing?
Investing of any sort can bring with it both benefits and risks. Larger corporations may very well be in a position to take the risks while keeping their eyes on the potential benefits. Educating yourself and staying up to date with any news on potential new drill sites or underground reservoirs can mean the difference in earning a healthy return on your investment or falling short of the goal. With a successful drill, your investment can start paying for itself within 100 days of the drills completion. Making the right choices during the time the drill is in operation can make it a very lucrative investment to consider.
What are the tax benefits?
One of the biggest benefits worth mentioning is the fact that the initial construction costs of a drill, called intangible drilling costs or ITC, are 100% deductible on your taxes for the year the costs were incurred. This intangible cost covers the land survey and clearing, labor wages and items required for the actual construction of the drilling rig itself. For many investors, this is a very desirable trait to have in their investment and it can help make future oil industry investments more profitable as well.
Stay up to date with all oil and gas exploration news so you can make a sound investment in drilling with the help of Oil Boom USA.