Energy and Environment Reporting for Texas

Giddy Up! Now You Can Buy Your Very Own Oil Well

A jointly-owned oil rig atop the Eagle Ford shale south of San Antonio.

Larissa Liska

A jointly-owned oil rig atop the Eagle Ford shale south of San Antonio.

But That Could Spell Trouble for Texas’ Drilling Boom

From the first geyser to burst from the salt domes of Spindletop to the Texas fracking pioneer George Mitchell, who helped unlock massive oil and gas deposits in shale, the Lone Star State has always been willing to gamble on drilling. And the bets are big. The latest boom has been mostly the work of companies and investors with access to plenty of capital — it’s estimated each oil well in the Eagle Ford shale of South Texas costs between $5 and $10 million to drill.

Now, with a minimum investment of $80,000, one Texas company is offering you your very own oil well. Oil Boom USA, a subsidiary of Texas oil and gas company Nakoma Petroleum, is inviting investors into the oil well game. Why? Because it’s an “unequaled tax shelter” and “exciting and fun,” according to the company’s website.

But opening up drilling to more than just oil and gas companies could signal trouble for the industry. As Michael Webber, Deputy Director at the University of Texas’s Energy Institute, explains to KUT’s Texas Standard host David Brown, oil well investing is “pretty good on the way up, but it could be pretty bad on the way down.”

“Usually a sign of the next peak coming is that people get most frenzied with their speculation and their investments,” Webber says. “All those people investing will help drive the boom even further, until it all collapses.”

Take a listen to the conversation:

Disclosure: UT’s Energy Institute is a sponsor of StateImpact Texas.


  • Gilmore Tuttle

    It is maddening how we have been hearing more and more radio ads that say you can “own your own oil well” as an investment. Who would be dumb enough to actually call these guys, or worse, actually hand over your money, when it’s an OBVIOUS SCAM? First, if these were legitimate cash-flowing wells that were currently cranking out barrels upon barrels of highly profitable crude oil, such that all you had to do was sit back and collect checks and get rich from all the oil that was produced, do you think for a minute that the owners of these wells would want to sell them to YOU? Of course not. They’d be sitting pretty on those wells, and well, sitting back collecting checks and getting rich. Now, what if those wells were not producing lots of oil, or because the price of oil is depressed, were actually losing money pulling the oil out of the ground. NOW do you think the owners might want to get rid of them, specifically by selling them to YOU? You betcha. It’s called the “winner’s curse” when somebody with much better information than you ALLOWS you to have something the real insiders don’t want, where you think you’ve won when in reality you’ve lost your ass, big time.

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