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by Terry Stanfield

Investing in domestic oil drilling can be one of the most rewarding types of investments available today. Not only are there tax benefits associated with this type of investing, but the returns on investment of a successful well are more than you can get anywhere else. Still, you have to be careful of the scams that are running in this industry. Just like any other type of investment, con artists often prey upon the naivety and greed of the investors. Here are three ways to avoid getting scammed when you are investing in the exploration for oil:

Stick close to home

Investing in an oil well halfway across the world not only will not offer you any tax benefits, but can end up parting you with your money sooner than you think. Not every country has the same laws as the United States when it comes to fraudulent investment activity. You are better off to stick close to home and with a domestic company when you are investing in oil exploration. Not only that, but investing in domestic oil drilling nets you tax benefits that you will not get if you invest in foreign oil expeditions.

Deal with the company

Dealing directly with the company instead of a series of middle men will help you avoid getting scammed. The company has more invested in the project, in most cases, than you. They have a desire to hit a good well and produce oil. You are giving them some money towards this venture, just as you would be giving money to a company when you buy their stock. When you deal directly with the company instead of someone who wants to sell you their shares in a well, you avoid the potential for being cheated. You should also get to know the company and make sure that they have a track record in this field.

Avoid get rich quick propositions

The get rich quick proposition is something to be avoided at all costs. Con artists prey on greed from the investor and hope that the desire to get rich will overcome their common sense. Avoid any get rich quick propositions that come your way. There is no such thing as a sure thing when it comes to investing in oil exploration. Why would anyone sell you something that has the potential to earn them millions?

If you follow this advice, you can avoid getting scammed when you are investing in domestic oil exploration. There are many benefits, including tax breaks, as well as the potential for good returns on your investment if you take the time to invest wisely.

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