Remember that song by Alabama called "If You're Gonna Play in Texas (You Gotta Have a Fiddle in the Band"? No? Well we recommend it. We're not quite sure why a band called Alabama is singing about Texas, but that's a topic for another day.
In any case, it's a similar story if you're gonna be a financial advisor in Texas. You gotta know about oil and gas. And now that the shale boom has spread across the nation, this topic is going to be important in most other states as well.
Disclaimer: This episode is 100% free of legal and tax advice. As far as we know, there's no insurance or medical advice either.
Covered In This Episode
- We got a ton of help from a brilliant book called Money In The Ground. We link to it below. If you have an office library, we recommend having a copy just in case.
- Mineral vs. surface rights
- Components of an oil lease
- Royalty vs. working interest
- Intangible drilling costs, including our nominee for the most obscure CFP exam question in the world. (Hint - It has to do with intangible drilling costs, alternative minimum tax, and geothermal steam.)
- Depletion taxation and estate planning implications
- Seriously, you should really consider that book linked below. The author did a stellar job.
Links to things we mention
- I drink your milkshake - Now a certified hipster meme!
- Wondering if you have oil and gas production in your state? Check out these maps from the Energy Information Agency.
- Here's one of dozens of videos about horizontal drilling and fracking. Remember, fracking itself is old technology! It's the horizontal drilling plus fracking that has changed the game.
- The critics' reviews of Armageddon on Rotten Tomatoes are worth a read.