Based in Dallas, Texas, Versatran Holdings is an oil and natural gas production and development firm with a primary focus to target overlooked, underdeveloped and undervalued oil and gas properties across Texas. The company partners with savvy, sophisticated investors to provide opportunities to own direct working interest in oil and gas wells, delivering both income and significant tax benefits unique to oil and gas investing. Earlier this month, CEO Today caught up with the Founder and CEO of Versatran Holdings – Eddie Watson.
So what are the tax write-offs and how do they benefit investors?
An investor may be able to capitalise on the significant tax benefits associated with oil and natural gas in three ways:
- Intangible Drilling Costs, or IDCs, are the costs of items in drilling and developing wells that have no salvage value, including wages, fuel, repairs and supplies. These expenditures typically account for approximately 75 to 80% of the total cost of the well and are 100% tax-deductible during the first year.
- Tangible Drilling Costs, or TDCs, are the costs of equipment and machinery used in operations. These expenditures, also 100% tax-deductible, are capitalised and depreciated over seven years.
- The Depletion Allowance provides a deduction of 15% of gross income based on average daily production of an oil or gas well.
Oil and gas exploration has a reputation of being risky, so how does Versatran Holdings approach the risk?
There is no doubt that oil and gas exploration can be risky, but Versatran Holdings endeavor to mitigate that risk based on a number of qualitative and quantitative criteria. Working with expert engineers and geologists in the oil and gas industry, we develop a foundation for success with each opportunity. From strategic lease acreage acquisition to detailed well design and drill planning to actual execution of well drilling and production in the field – we strive to build wealth while hedging risk for our clients.
How has your leadership as CEO played a role in Versatran Holdings’ success?
As CEO, I take a very hands-on approach with my company’s operations and with every single client. It is important that my employees and I stay involved and engaged in seeking out, acquiring and producing the best quality opportunities, while providing exceptional individualised attention and value to our clients.
What steps do you take to offer a unique service for each individual partner you work with?
At Versatran Holdings, we begin each client relationship with a fundamental concept: We are not just a salesperson; we are your consultant. We work hand-in-hand with our clients to understand their investment goals and objectives, their past experience and future expectations. We create a blueprint for our clients with each investment that clarifies our strategic approach to the opportunities and benefits afforded while addressing risk tolerance, investor suitability and personal privacy.
What makes Versatran Holdings different from other oil consultants?
At Versatran Holdings, our clients are assigned direct ownership in oil and gas wells. By comparison, many other companies provide investment in joint ventures, limited partnerships, MLPs, etc., where the investor owns a portion of an entity rather than a percentage of the well itself. While direct ownership in wells is not a new or unique concept (it’s been around since the early 1900s), it does provide our clients with an assignment of real property, similar to a deed for a home or the title for a vehicle.
Why should people invest in oil and gas?
Investing in oil and gas wells is an investment in America. The United States is one of the few countries in which an individual can own an oil and gas well, and investing in domestic oil and gas increases national security by decreasing our reliance on foreign imports. The US Government has created substantial and significant tax benefits for oil and gas investors, attracting favorable attention from sophisticated, high-net-worth individuals seeking alternatives to investing in more traditional options like stocks, bonds or real estate.