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Turnkey Drilling Contracts 101

Learn how turnkey contracts work with oil and gas investments.

Oil and gas investments can be completed under turnkey contracts.

The oil and gas industry can be volatile and risky, which is why oil and gas investments have the opportunity to create incredible returns for investors. However, many investors and land owners aren’t prepared to take on the task of managing the wells. To help alleviate this pressure, a turnkey drilling contract can provide the returns investors are looking for while putting the actual drilling processes into the hands of drilling management contractors who are experienced in the field and can maximize production for greater profits.

A Risky Investment

Regardless of whether you know how to invest in oil and gas, it’s a risky investment that can provide the high returns many investors want. The nature of oil and gas investments can be volatile, but that doesn’t mean individuals don’t want to take the risk. However, they need to find ways to mitigate that risk as much as possible. Drilling management contractors who work under a turnkey drilling contract understand the best ways to reduce the level of risk investors will take. While these contracts can sometimes cost a little more than typical drilling contracts, the benefits often outweigh these additional costs.

How Does It Work?

A turnkey drilling contract works similarly to other types of turnkey contracts in other industries, such as the construction industry. Investors and owners give up their control over how the drilling process is completed, allowing experienced oil and gas professionals to drill an effective well that maximizes production numbers. This increases the returns investors will see. In these types of contracts, the contractors are encouraged to do the best job possible to ensure they will be paid for the work and investors can wait until production is underway before they contribute their own funds. Investors also don’t need to worry about making the tough decisions related to drilling, giving full control over to experienced professionals.

A Variety of Options

Operating an oil and gas well under a turnkey contract opens up a number of possibilities in how to handle the processes. In many cases, investors want a contractor who can completely take over drilling and production to ensure the best results. However, experienced investors may create a contract that gives them more input into the decisions, based on their level of expertise. This benefit can also help investors keep their drilling costs lower.

Knowing how to invest in oil and gas requires understanding the use of a turnkey drilling contract. Oil and gas investments require a higher level of risk than many other types of investments due to the volatile tendencies of the industry. Hiring a drilling management contractor to handle the difficult aspects of drilling a well and producing as much oil and gas as possible can maximize returns and make any project more lucrative.

If you’re interested in investing in oil and gas, contact us. We put our own funds into all of the investments we make, showing our confidence in the value of those investments.

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