by Justin Kree
MIDLAND- If you are a Texas resident and a least 18-years-old, you can go online and invest in an oil company.
promises no credit checks are done on the investors and the benefits could be huge.
"It doesn't matter their credit history or what their background is. It's a way of going and piggy-backing on the wisdom of the crowd," CEO of
, David Taylor, said.
First, you set up an account on the website and pick the project you want to invest in. After that project starts up and is funded, the rest of the money made will be distributed to the investors at the end of the year.
"If you have one share, you make a portion of it and if you have 1,000 shares you obviously get that portion of the investment that comes out," Taylor said.
There are different projects on the website to choose from. One local oil expert says do your research before spending money.
"Choose companies that you recognize. If you can do some research on that company to see they're legitimate, have a good track record they have a good history of drilling producing wells then it's perfectly fine," Oil Expert, Morris Burns, said.
Taylor agrees that not all oil wells will be plentiful and sometimes there is a gamble that isn't in the investors favor. He claims the tax write off is an option at the end of the year to get most of your investment money back if the project was a bust.
"There is a beautiful tax write off and the tangible drilling cost so you can have almost hundred percent of your tax credit written off towards your active income," Taylor said.
Burns says investing face to face is better because you can see how much oil is being produced. He goes on to say that you can see your investment dollars grow. Online, there is no way of telling.
"I certainly would not advise someone to do this until they check out the company because this could be a fly-by-night oil company that has never drilled a well in their life," Burns said.
Taylor says a background check is done on all the companies before they put projects on the website for people to invest in.