Invest in Oil Wells: Working Interest, §263(c) Write-Off

For Accredited Investors

Direct working-interest ownership in US oil wells. 100% first-year tax deduction, monthly cash distributions while a well produces, and a tangible asset you hold at the wellbore — not a paper claim.

Current status: every project we have offered to date is fully funded, and one program is open to accredited investors right now. The next program is being selected. Investors on the first-look list see the offering documents before anyone else.

Get First Look at the Next Program Calculate Tax Savings

100%

Year-1 Tax Deduction Intangible drilling costs are deducted the year drilling begins (IRC §263(c)); the tangible equipment balance is expensed the same year under §168(k) bonus depreciation. For a properly structured working interest, those deductions can offset W-2 and business income under §469(c)(3).

Monthly

Cash Distributions Once a well sells oil, revenue is distributed monthly — net of royalties and operating costs, varying with production and price, and declining as the well ages. Fifteen percent of your share of gross production revenue is sheltered by percentage depletion (§613A). No distribution is guaranteed.

2,303,887

Well Records Behind Every Screen Every project is screened against state and federal filings before we present it — 220 actively-drilled U.S. oil counties graded A–F on breakeven economics, re-run daily.

Is oil well investing right for you?

Direct oil investment is a fit if you check most of these:

✓ You're an accredited investor ($200K+ income or $1M+ net worth excl. home)
✓ You want to reduce current-year taxes on high income
✓ You want monthly income, not capital appreciation

✓ You can meet the program minimum — it varies by program and is stated in that offering's documents — and hold long-term
✓ You understand oil wells carry drilling risk, including total loss of the money you put in
✓ You want a tangible asset, not a paper security

How investing in oil wells works

Review the Project Geology and offset-well review, the AFE (line-item drilling budget), the operator's state-filed record, and the full offering documents.

Subscribe Complete accreditation verification, sign the subscription agreement, and fund exactly as the offering documents instruct — they name the account, the parties, and the conditions.

Drilling & Completion The operator drills, casings, completes, and hooks the well up to the pipeline. Your drilling-cost deduction lands in that tax year whether or not the well succeeds.

Monthly Income If the well produces commercially, distributions follow the sale of oil and continue for as long as it produces. Amounts vary and decline over the life of the well.

What you actually own

This is the part most sponsors leave vague, so here it is plainly. You buy an undivided fractional working interest in a specific well or defined drilling program. That interest carries two numbers you should be able to recite before you wire a dollar:

Working interest (WI) Your share of the well's costs — drilling, completion, and ongoing operating expense. It is also the share of the tax deductions that flow to you.

Net revenue interest (NRI) Your share of the revenue, after the landowner royalty and any other burdens come off the top. NRI is always lower than WI, and the gap between them is the single most important economic term in the deal.

A distribution is your NRI multiplied by the barrels sold that month at the realized wellhead price, less your WI share of operating costs. Both numbers, the burden stack behind them, the cost-overrun terms, and every dollar of sponsor and operator economics are stated in the offering documents for each program — ask for them in writing, and bring your CPA to the briefing call. Tax reporting depends on how a program is papered: partnership programs issue a Schedule K-1, and direct working-interest assignments report through revenue statements and 1099s.

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.

Wells can disappoint 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.

Oil prices move 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.

Production declines 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.”

Your money is illiquid There is no market to sell a private working interest. Plan to hold for the life of the wells. Only invest capital you can leave in the ground — this belongs in a slice of a portfolio, never the core of one.

You could lose your entire investment. That sentence is required by law — but we’d say it anyway. And here is the counterweight most sponsors never mention: the drilling deduction arrives whether or not the well succeeds. If a well is a dry hole, that loss is generally deductible too. The tax code shares the risk with you — that is exactly why Congress built it this way.

Before you invest in oil wells

Investing in oil wells directly is different from buying an oil stock or ETF. You own an undivided fractional interest in the physical well; you receive your share of oil revenue monthly, pay your share of operating expenses, and claim your share of tax deductions. The working-interest structure is why the tax benefits are so strong — the IRS treats you as a partial operator of the well. Review the following before committing capital:

Oil Well Investment Risks → Dry holes, price volatility, operator risk, and how to vet a sponsor.

How Well Economics Actually Work → Decline curves, breakeven price, and why no honest sponsor quotes you a yield.

Tax Advantages in Detail → IDC, tangible equipment, depletion allowance, 1031 strategies.

Royalty vs Working Interest → Which structure fits your goals — tax shelter or pure passive income.

Why investors work with Kingdom Exploration

We are not a fund, not a broker, and not the operator. We source, verify, and negotiate direct participation in U.S. onshore oil and gas projects, and drilling is carried out by established operators with verifiable records in the target area. That separation is deliberate: our diligence has no drilling program of its own to protect.

Project locations vary by program — the specific state, county, formation, and operator are identified in that offering's documents, not assumed here. What is constant is the standard of work: every project is screened against 2,303,887 American well records and the state filings behind them, and 220 actively-drilled U.S. oil counties are graded A–F on breakeven economics before we look at a single deal. Every project ships with independent third-party engineering, a full AFE cost breakdown, and the operator's state-filed record, so you can compare offers apples-to-apples.

Economics — every fee, burden, promote, and dollar of sponsor and operator compensation — are disclosed line by line in the offering documents before you commit, and we will walk through all of it on your briefing call with your CPA on the line.