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Friday, January 22, 2010

6 Ways To Evaluate A Potential Oil And Gas Investment

By John McDonald

When you look at oil and gas investing there are numerous ways you can look at the market and the potential investment. You should do plenty of research so you know you are making a good decision with your money. Here are 6 things you can look at to be sure you are making a good decision or you should back out.

1. The company.

If you're looking into investing in a selected company you must look at everything about them. Check out the history of the company, the operatives and board members, and the description of the business. It is also important when researching a business for oil investments to take a look at the locations and subsidiaries.

Two. Company Mergers and Acquisitions.

If recent mergers and acquisitions have took place you want to investigate both of the enterprises that have combined. Find out about all equity, ventures, and everything about the companies involved.

Three. Research the debt.

Debt is a really large deal when it comes to gas investments. What quantity of money does the company owe to other investors, banks, and others. The debt should be less than 1/2 the cash. This should include liabilities for the company also.

4. Competitors.

When you're considering oil and gas investing it's critical to find out about the key rivals. Does the business have a foot forward in front of the other competitors?

5. The market placement.

When you look at oil investments it's vital to look at the whole market. You can't just research the investment you are looking at but you must be able to have a look at the overall prospect of the market. Where does the company you wish to invest in sit with the complete market? You should compare numbers and feel the company is doing very well before you start with your investment. Assess the weaknesses and strengths of the company of choice versus the competitors and see where all of them stand.

6. Potential profits.

If you invest in the company of choice what is the potential of profit you stand to make? You will have to look at the history of the gas investments and how much money other folks made on the profits. Be certain a profit is what's being made and people are not just breaking even.

When it comes to oil and gas investing there are many paths to evaluate the investment. You need to take a look at the company as a entire. you also must glance at the entire industry, including the competition, the products, profit, and more. - 23221

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