FAQs

Oil and Gas Investing FAQs

What does Crown Exploration do? 

For over 27 years, Crown Exploration has provided Accredited Investors the opportunity to diversify their portfolios, earn potential monthly income, and lower their tax burden by acquiring Oil and Gas interests through a Broker-Dealer.


What differentiates Crown Exploration from similar companies?

Crown has set itself apart from other exploration companies by applying new technology to proven areas, keeping its investors completely informed, and scrupulously upholding industry standards. Additionally, Crown Exploration operates with an exclusive FINRA-licensed Broker-Dealer, meaning the Registered Representatives have successfully completed qualification examinations, as well as stringent Continuing Education (CE) requirements. These CE programs are designed to ensure we uphold and adhere to high industry standards.


Why use a Broker-Dealer for investing in the oil and gas industry? 

Obtaining a broker’s license involves an extended level of education, experience, and a commitment to excellence. This license gives representatives an even deeper understanding of the financial industry. We are dedicated to using this enhanced knowledge to better serve our clients by keeping them up-to-date with the latest oil and gas industry insights and providing them with strategic guidance from start to finish. Moreover, working with a licensed Broker-Dealer means that they are regulated, audited, and each of our registered representatives has Series 63, 22, & SIE or 63, 7, & SIE licenses. It’s accountability you can count on.

 

What does it mean to be an Accredited Investor? 

An Accredited Investor is an individual or entity that meets specific financial criteria, allowing them to invest in certain private securities offerings that are not registered with regulatory authorities. In the United States, as defined by the Securities and Exchange Commission (SEC), an accredited investor can be an individual with an annual income exceeding $200,000 ($300,000 for joint income with a spouse) for the last two years, and a reasonable expectation of the same income in the current year. Alternatively, an individual with a net worth exceeding $1 million, either individually or jointly with a spouse, excluding the value of their primary residence, qualifies as an accredited investor. Entities, such as certain types of trusts, institutions, and partnerships, can also meet the criteria. Accredited investors have access to a broader range of investment opportunities, including private equity, hedge funds, and certain offerings in the startup and private placement markets.

 

What are the advantages of investing in Oil and Gas?

  1. Potential for Monthly Income: Oil and Gas investments have the potential for monthly returns, especially during periods of high commodity prices. As global energy demand continues, investments in Oil and Gas can be financially rewarding long term.
  2. Diversification: Including Oil and Gas investments in a portfolio provides diversification, helping to spread risk. These assets may not always move in tandem with traditional investments, such as stocks and bonds, offering a hedge against market volatility.
  3. Tax Benefits: Investors in Oil and Gas can benefit from various tax incentives, including deductions related to intangible drilling costs, depletion allowances, and bonus depreciation. These tax advantages may enhance overall returns and provide potential relief during tax seasons.
  4. Inflation Hedge: Historically, commodities, including Oil and Gas, have demonstrated the ability to act as a hedge against inflation. As the prices of goods and services rise, the value of commodities often follows suit.
  5. Stable Demand: Given the essential nature of energy resources, there is generally a stable demand for Oil and Gas. This consistent demand can contribute to the resilience of investments in the sector over the long term.
  6. Global Economic Impact: Oil and Gas investments are influenced by geopolitical events and global economic trends. Being attuned to these factors allows investors to make informed decisions based on a broad understanding of the world economy.


What are the risks involved with investing in Oil and Gas? 

Similar to various investment opportunities, participation in the Oil and Gas industry involves inherent risks. Notably, the occurrence of a dry hole, among other risks, represents a potential challenge, even for prominent corporations. However, at Crown Exploration, we prioritize risk mitigation through a comprehensive array of procedures and measures. Our commitment to minimizing risk spans across all levels of operations.


How does an investor choose the right Oil and Gas investment company?

The selection of an investment partner warrants careful consideration, emphasizing the significance of choosing an experienced company with a demonstrable track record of success. Over the past 27 years, Crown Exploration has consistently sought to apply cutting-edge technology to proven areas, ensuring transparency and comprehensive communication with investors, while meticulously upholding industry standards.


Another pivotal criterion in the selection of an appropriate Oil and Gas investment company lies in the establishment of an exceptional leadership team. At Crown Exploration, our leadership is comprised of foremost industry experts, providing unparalleled experience and strategic acumen to adeptly navigate the complexities of the sector. Our unwavering commitment to excellence in leadership is evidenced by the longstanding tenure of many employees within our organization, with numerous individuals having contributed their expertise for over two decades.

 

How does Crown Exploration use the latest drilling technology? 

Crown Exploration collaborates with prominent operators, leveraging cutting-edge drilling technology to mitigate dry hole risks and enhance the probability of drilling productive wells.


Does Crown Exploration contribute to the partnerships it forms? 

Crown Exploration upholds a steadfast commitment to every partnership we cultivate, exemplified by our active financial contribution to the costs associated with each Venture. As a testament to our dedication, we actively participate as investors in every program we undertake.


What tax benefits can be expected with investments in Oil and Gas?

Investing in Oil and Gas offers investors various tax benefits that can enhance overall returns. One notable advantage is the deduction of Intangible Drilling Costs (IDCs), allowing investors to deduct a substantial portion of drilling-related expenses immediately. Additionally, the Depletion Allowance permits the deduction of income corresponding to the depletion of Oil and Gas reserves. Investors may also benefit from Percentage Depletion, tax credits for specific activities, and the pass-through structure of entities like Limited Partnerships or Limited Liability Companies (LLCs). These structures allow tax deductions, credits, and losses to flow through directly to individual tax returns. Furthermore, net operating losses (NOLs) from Oil and Gas investments can offset other income, potentially reducing overall tax liabilities. It is imperative for individual investors to seek guidance from their own tax professionals to navigate the intricate tax landscape associated with Oil and Gas investments and ensure compliance with current tax regulations.

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