Oil & Gas Investing 101 — written & narrated by Sean Pruitt, 30 years in the field. About 76 minutes.
Invest in American Oil Wells. 100% Tax Deductible This Year.
Project Homestead is open now — a Mid-Continent horizontal development block, offered to verified accredited investors. Here is what you are looking at: put capital into drilling an American well and deduct 100% of it this year — against your salary or business income. Drilling costs are deductible the year drilling starts, and the equipment is expensed the same year under permanent bonus depreciation. Then the well pays you monthly while it produces. This has been federal policy since 1913 — and in 2025, Congress made it permanent.
See Project Homestead → Request the Investor Package Not ready to talk? Get the free 2026 Oil & Gas Tax Guide →In one sentence
You own a direct working interest in a specific American oil well — not a fund, not a stock, not a royalty product. We use our own well database to screen the whole country, then partner with operators already producing in the strongest areas to drill alongside what is already working. Drilling costs are deductible the year drilling starts, and a working interest distributes revenue to its owners monthly for as long as the well produces.
A fractional direct working interest in a named well — real ownership of the wellbore, with the tax treatment Congress wrote for drilling under IRC §263(c).
Accredited investors only. These are private placements under SEC Reg D 506(c), which requires formal third-party verification of accredited status before you can invest.
Drilling is speculative and illiquid. Wells can underperform, cost more than budgeted, or fail to produce commercially. You can lose your entire investment. Never invest money you need.
We are new enough that we would rather you verify than trust. Every claim around a project is publicly checkable before you wire a dollar:
- The operator’s actual production history sits in state regulator records — we hand you the well identifiers so you can look them up yourself (Texas RRC, Oklahoma OCC).
- Any offering’s Form D is filed publicly on SEC EDGAR.
- The geology and offset-well data behind a project come from public records, and we show our work rather than summarising it.
- A real name and a phone that gets answered: Sean Pruitt · (307) 622-1645.
Why High Earners Invest in Oil Wells to Offset W-2 Income
Three reasons — and only one of them is the tax break.
Drilling costs are deductible now — not over 27 years like a rental property. Intangible drilling costs (typically 60–80% of a well) are deducted the year drilling starts. The equipment is 100% expensed under bonus depreciation. Together: 100% deductible in year one.
Producing wells sell oil every month, and investors are paid from those sales — monthly, not quarterly. Distributions vary with production and price, and they decline as wells age. We show you the decline curve before you invest, not after.
You own a stake in a specific well in American ground — a hard asset producing a commodity the world reprices every day. Not paper claims on someone else’s barrels, and priced at the wellhead, not on Wall Street.
None of this is a loophole. Congress wrote these rules on purpose — the tax code has favored domestic drilling since 1913, because the country needs people willing to fund its wells. On July 4, 2025, the One Big Beautiful Bill Act made 100% bonus depreciation permanent for property acquired after January 19, 2025 — if you read elsewhere that bonus depreciation is “phasing down to 20% in 2026,” that information is out of date.
The Rotation Has Already Started
You don’t have to take our word for it. Here is what the most-watched investors in America were saying as of July 2026 — in their own words.
We don’t publish market statistics we can’t hand you a source for, so the case here is structural rather than statistical — and you can check every piece of it yourself. Energy is a small share of the index relative to its share of the real economy. Most upstream spending goes to replacing the production that declines out of existing wells every year, not to adding new supply. And power availability has become the binding constraint on the industries growing fastest.
The companies building AI are now competing for electricity, and gas-fired generation is a large part of what fills that gap alongside renewables. That is not a forecast we are making — it is what the people building the data centers say publicly, including the Nvidia quote above.
Energy is one of the smallest sectors in the S&P 500 today, far below the weight it carried in decades past — while the barrels the world burns still have to be replaced every year. Every producing well declines; without continuous drilling, supply falls on its own.
We are not asking you to call a rotation. The reason this works on a spreadsheet has nothing to do with sentiment: the first-year deduction lands whether or not the sector reprices, and the wells either produce or they don’t. Everything else on this page is secondary to those two facts.
Here is the part that matters for you: when capital rotates into a sector, the ground floor is where you want to be standing — not paying Wall Street’s multiple after the move. Direct participation is the ground floor. And the tax deduction doesn’t wait on any rotation — it lands in year one either way.
Third-party statements above are the opinions of the named speakers on the dates shown — not predictions, endorsements of Kingdom Exploration, or guarantees — and may have changed. Oil prices are volatile and can move sharply in either direction over short periods. A rising sector does not make any individual well succeed — which is exactly why every deal we present must first survive the engine below.
The Tax Math, In Plain Dollars
Almost nobody in this industry shows the actual math. Here it is — then check it with your own CPA.
A working interest is your share of the well’s costs — drilling, completion, and monthly operating expense — and the share of the deductions that flows to you. Your net revenue interest (NRI) is your share of the revenue after the landowner royalty and any other burdens come off the top. NRI is always lower than working interest, and the gap between the two is the single most important economic term in any deal. Both numbers are stated for each specific program in its offering documents.
Barrels sold that month × the realized wellhead price × your NRI, less your working-interest share of operating costs and severance taxes. Paid monthly once the crude purchaser settles, for as long as the well produces — declining as it does. Tax reporting follows the structure: partnership programs issue a Schedule K-1; direct working-interest assignments report through revenue statements and 1099s.
Hypothetical illustration only, not tax advice and not a projection of investment results. Assumes a working interest structured for the active-loss exception, costs substantially allocated to deductible drilling costs, the well placed in service in the same tax year, and sufficient income, basis, and at-risk amounts. Consult your own tax advisor.
Run Your Own Numbers
Slide to your investment. Tap your bracket. Watch what the tax code does.
Assumes a first-year deduction equal to 100% of the investment (intangible drilling costs plus bonus depreciation on tangible equipment, well placed in service the same year). Your deduction may be lower and arrives on the program’s drilling schedule. State income tax savings can add more — Oklahoma, for example, conforms fully to the federal deduction. Hypothetical; not tax or investment advice.
Labor, rig time, fuel, mud, cementing — typically 60–80% of a well’s cost — deductible the year the money goes in. Even a December investment can count for the current tax year if drilling starts within 90 days after year end.
The tangible side — casing, tanks, pumps, wellhead — is the other 20–40%. It can now be 100% expensed the year the well goes into production. The 2025 tax law made this permanent. No more phase-outs, no more racing a sunset date.
This is the rare one. Congress exempted oil & gas working interests from the passive-loss rules — so these deductions can offset salary and business income. Rental real estate can’t do that once you earn over $150K. Whether it applies to you depends on how the interest is held — the exception requires a working interest held in a form that does not limit your liability. Each offering states its structure in its offering documents; read that section with your CPA before you invest.
Once oil flows, 15% of your share of gross production revenue is sheltered from tax every year — and it keeps working even after you’ve recovered your entire investment. A benefit Congress reserves for independent producers and their investors, not the majors.
Tax outcomes depend on how your interest is held (IRS Pub. 925), your income, basis and at-risk amounts (§465), the excess business loss cap (§461(l) — $512,000 joint for 2026), AMT interactions, and recapture on sale (§1254). Laws change. Nothing on this page is tax advice — bring your CPA to the briefing call. We like CPAs.
Tax-law statements on this page last reviewed July 2026 against IRS Notice 2026-11, IRS Publication 5652 (Oil & Gas), and the current Internal Revenue Code.
How It Works — Four Steps
From first click to first distribution, this is the whole path.
Answer a 60-second questionnaire. If it fits, accreditation verification takes about 10 minutes — once. Federal law requires it for everyone.
A private briefing call, then the confidential documents: the offering memorandum, the well economics, and the actual drilling cost sheet (AFE). Bring your CPA.
Your capital goes into the ground and the drilling-cost deduction lands in that tax year — whether the well succeeds or not.
Once oil sells, distributions follow production — month after month, for as long as the well produces. Amounts vary and decline as wells age.
Most Sponsors Pitch the Only Deal They Have. We Grade Them All.
Here is the industry’s quiet problem: the typical sponsor evaluates one deal at a time — usually acreage they already control — and everyone involved gets paid when the well gets drilled, not when the truth gets told. We built the opposite.
Kingdom Scout™ is our proprietary due-diligence engine. It holds the drilling record of America — 2,303,887 well records from official state and federal filings, refreshed daily — and it can evaluate the best places to drill in minutes, grading every actively-drilled U.S. oil county A through F on real breakeven economics before we look at a single deal.
Offer the 100% deduction and wellhead economics — but evaluate one deal at a time, with no national data engine behind the decision.
Have national-scale well data — but they don’t share it, and they don’t offer ground-floor participation. The only way in is their stock, with none of the drilling tax deductions.
Both. Ground-floor participation with the 100% first-year deduction — screened by an engine with national-scale data that, to our knowledge, no other ground-floor sponsor has.
220 actively-drilled U.S. counties, graded every morning. 39 make the A list. We hunt there — and a marginal deal always loses to a better-ranked one.
Project Homestead Is Open. Earlier Projects Are Funded and In the Ground.
Previous programs filled with investor capital and are working. Project Homestead is the one you can still participate in — the confidential summary, geology and terms go to investors who verify accredited status.
Right now, Kingdom Scout™ is analyzing thousands of drilling opportunities across the nation to select our next project — hunting for the lowest breakeven price, the strongest surrounding production, and the fewest ways for a well to fail, out of everything the national record can see.
A landman hears about a lease. A geologist spends weeks studying well logs. Title research crawls through county courthouses. Months later, the sponsor pitches you the one deal that came out of that one look — because it’s the only deal they have.
The engine reads the drilling record of America — every well, every dry hole, every frac job, every operator’s track record — and re-grades every active oil county every morning. Research that used to take teams of professionals a lifetime now takes days. Then the best opportunities in the country compete for our next dollar — and yours.
The engine re-screens the national record every morning, so the shortlist we negotiate from is current on the day we negotiate — not a snapshot from whenever somebody last had time to look. Human judgment still makes the call: our geologist and landman work only the ground the data already supports. See how the engine works →
The Guy Whose Name Is On It
I bought into my first oil well in 1994. In thirty-some years I have seen every way a good-looking deal can go wrong — and I got tired of watching people find out after the check cleared. So I built the screening engine I always wished existed, and I put my own money into every project we offer. If a deal is not good enough for my money, you will never see it. — Sean Pruitt, Founder, Kingdom Exploration
The backstory: there are roughly 9,000 independent operators in the U.S., and every one of them says they have the best deal. Sean has never drilled or operated a well himself — in 2008 he learned that the lease-to-completion grind can run upwards of five years, so instead he built campaigns that reach operators who have already found oil and are searching for capital to expand on a discovery. He partners with them as the investor, first in line. Hear the whole story →
Over those years Sean has helped structure and has personally participated in oil & gas ventures spanning roughly 400 wells — as an investor and organiser. He is not the operator, and Kingdom Exploration does not drill or operate wells; we partner with operators already producing in the area. That figure is his own good-faith count of ventures he has been part of, not an audited or itemised record, and taking part in past wells says nothing about how any future well will perform.
Sean also teaches this business in the open: his free YouTube videos on how oil-well investing actually works are followed by investors, working oil men, and market professionals — and over 1,400 of their unedited comments and reviews are published on this site.
What Oil-Patch Insiders Say
Sean’s oil-market videos draw investors, oil executives, and people who make their living in the patch. We publish 1,400+ of their unedited comments and reviews — and the ones we’re proudest of come from people who work in this industry, because they judge the substance, not the pitch.
Unpaid public comments on Kingdom Exploration’s educational videos. They reflect views on our commentary and transparency, not investment performance, and are not a promise of results.
See How One of Our Projects Works
Five minutes. One real project. No hype — just how the money, the drilling, and the payout actually fit together.
What Can Go Wrong (We’d Rather Tell You Now)
Every oil investment page is legally required to say this. We actually mean it — because investors who understand the risks make better partners.
Even good rock can underperform, and mechanical problems happen. We favor locations near proven producing offset wells and screen every location against the national record — that reduces avoidable risk; nothing eliminates it.
Distributions rise and fall with the price of oil. That’s why the engine grades counties on breakeven economics — we favor deals that still work at conservative prices, not deals that need $100 oil to breathe.
Every well produces less over time — that is physics, not failure. Distributions are strongest early and taper for years. We model the full decline curve before we present a deal, and we never quote a “yield.”
There is no market to sell a private working interest. Plan to hold for the life of the wells.
Oil & Gas Investment Tax Deductions: Straight Answers
Every project we’ve offered to date is fully funded — and the next one is being selected right now. Kingdom Scout™ is currently analyzing thousands of opportunities across the nation for the lowest breakeven and the strongest surrounding production. Investors who qualify and get on the list see the next project first, before it’s offered anywhere else. The questionnaire below takes 60 seconds and commits you to nothing.
Generally: $200,000+ annual income ($300,000 with a spouse) for the last two years, or $1 million+ net worth excluding your primary residence, or certain professional licenses. Federal law limits these offerings to accredited investors — it’s about who may invest, not a judgment about anyone.
About 10 minutes, once. Rule 506(c) requires us to verify accreditation — typically a short letter from your CPA or attorney, or a quick third-party check. We walk you through it, and nothing is due until you’ve seen a deal you actually want.
It varies by program. Minimums, unit sizes, and terms are covered in each offering’s confidential documents and on your briefing call — the fastest way to get specifics is the short questionnaire below.
Yes — it comes from two long-standing provisions. Intangible drilling costs (typically 60–80% of a well) are deductible in year one under IRC §263(c), and the tangible balance is 100% expensed under §168(k) bonus depreciation, which the July 2025 tax law made permanent. The result: 100% of your drilling investment deductible in year one. Your personal outcome depends on program structure, the timing of the well going online, and your own tax situation — that’s a conversation for your CPA, and we’ll happily get on the phone with them.
For properly structured working interests, yes — IRC §469(c)(3) specifically exempts oil & gas working interests from the passive-loss rules, which is why high W-2 earners pay attention to this asset class. The exception depends on how your interest is held, and it comes with trade-offs your CPA should review. This is the single most misunderstood rule in oil & gas investing, and it is a structural question, not a judgment call: each offering’s documents state how the interest is held, and that is the section your CPA should read before you invest.
Distributions begin after a well is drilled, completed, and selling oil — each program’s documents lay out its drilling timeline. Once sales start, investors are paid monthly. Amounts vary with production and price, are net of royalties and operating costs, and decline as wells age. No distribution is ever guaranteed.
You can lose the money you put in — that is the honest answer, and it’s why we favor locations near proven producing wells and screen every location against the national record first. The tax code softens the blow: dry-hole costs are generally deductible, so part of the loss comes back at your tax rate. Reduced, not eliminated.
It depends on the program’s structure — partnership programs issue a Schedule K-1; direct working-interest assignments report through revenue statements and 1099s. Your briefing call and the offering documents spell out exactly what you’ll receive and when, so your CPA is never guessing.
It’s possible through a self-directed IRA, but think twice: the headline benefits here are deductions, and deductions are wasted inside a tax-deferred account. Most investors use taxable dollars for drilling programs precisely because of the write-offs. Details on our self-directed IRA page — and talk to your advisor.
Stocks give you liquidity and diversification — at Wall Street’s price, with none of the drilling deductions. Direct participation puts you in at the wellhead: ground-floor cost basis, monthly distributions from specific wells, and the tax treatment Congress reserved for the people who actually fund American drilling. It’s less liquid and more concentrated — which is why we built an engine to screen every deal, and why it belongs in only a portion of a portfolio.
Often not against your active income — and this trips up more investors than anything else. The §469(c)(3) working-interest exception requires holding the interest directly or through an entity that does not limit your liability; LLC members and limited partners generally do not qualify. Structure is everything here. Each offering’s structure is specified in its offering documents — read that section with your CPA and confirm the interest qualifies before you invest, rather than taking anyone’s word for it on a call.
Yes — drilling deductions reduce your overall taxable income, including in a year you realize a large gain from selling a business, property, or stock. Timing matters: the deduction lands in the year drilling costs are incurred, so pairing a planned gain with a drilling investment is a conversation to have with your CPA early, not in December.
Generally not for investors in independent-producer programs. Excess IDC is not treated as an AMT preference item for non-integrated producers under IRC §57(a)(2)(E), subject to limits. If you have AMT exposure from other sources, have your CPA model it — it rarely changes the outcome, but you should know before you invest.
Yes — high-earning professionals are the classic fit. A properly structured working interest is one of the few investments whose deductions can offset W-2 and practice income (IRC §469(c)(3)) rather than being trapped as passive losses. It carries real drilling risk, which is why it belongs in a slice of a strong earner’s portfolio — never the core.
Keep More of What You Earn. Own a Piece of What America Runs On.
Deals screened against 2,303,887 American well records. Tax treatment written into federal law for over a century — and made permanent in 2025. Every project to date is fully funded, and the engine is choosing the next one now — qualify today and you’ll see it first. The next step costs 60 seconds and commits you to nothing.
