Investing in oil drilling can be risky. Only one in three exploration wells is successful, making the cost of finding oil and establishing a producing well a costly and chancy endeavor.
Risky business
For those willing to take the risk and invest in an oil well, the participation can be lucrative. But you must be aware of and understand the risks involved in this type of investment. Capital is necessary to conduct oil and gas exploration. The costs for a geologist to study a parcel of land, get the site ready to drill and to set up the exploration drilling equipment all costs money, a lot of money.
Investors who understand the complexities of oil exploration, are able to assess the risks associated with oil exploration correctly and can afford a total loss of their investment, are the investors best suited for oil exploration investment. Drilling for oil and natural gas wells is an exceptionally risky endeavor and not for those easily scared by tricky financial investments.
Reducing risk
Companies, such as Nakoma Exploration, are employing highly sophisticated technologies to increase the chances of finding the right oil-rich locations, thereby reducing the investors’ risk.
Geologists working for oil companies conduct studies to find oil deposits. They search for certain conditions, which may indicate an oil trap. Using satellite images, they can study surface rocks and topography. They also employ gravity meters to gauge miniscule fluctuations in the Earth’s gravitational, which could indicate oil flowing below the surface. Another technology they use is seismology to create shock waves that pass through layers of rock. The shock waves travel through the rock and are echoed back by different layers of rock. The shock waves move at diverse velocities depending upon the type or thickness of rock layers through which they pass. Vibration sensors detect the reflections of the shock waves and results are read for signs of oil or gas reservoirs. Once a potential site is located, the location is marked using GPS coordinates. Geologists then take small core samples acquired by shallow drilling to determine if oil is present.
Geologists then craft Common Risk Segment Maps (CRS Maps), which are created based on geographical models and data they have gathered, to calculate all the different geological aspects. The CRS Maps are easily understood by investors and non-geologists to review and base oil exploration choices on.
We all want to be an oilman millionaire
Don’t we all secretly want to be Jed Clampett, a rich oilman with a flow of money as steady as the oil from his oil well? Striking it rich in the oil business is the stuff dreams are made of. Before you take the leap, become knowledgeable about the industry and the risks involved. To know more visit us