Speculation exists that the oil and natural gas industry may experience positive financial news. A July 2018 report from CNBC noted oil prices are “surging.” Appearing in the press next to CNBC’s announcement, Bloomberg reported that global natural gas prices rose for the first time in two years. While no one knows if prices continue to rise, would-be investors do look at such news with interest. If oil and natural gas prices increase, successful investments could pay excellent rewards. Not everyone knows how to get involved with oil and natural gas investment endeavors. Recent publicity over “Freedom Checks” might provide the previously elusive information potential investors seek.
Billions upon billions of dollars in Freedom Checks shall go out to recipients. Confusion abounds about the origins of these checks. Common misconceptions center on the notions these checks come from a government program. That is incorrect. Freedom Checks reflect distributions from private investments in U.S. domestic oil and natural gas ventures. Specifically, these distributions come from Master Limited Partnership endeavors as defined under the law.
Many years ago, Congress passed laws intended to stimulate investor interest in domestic oil and natural gas. A typical legislative “sweetener” involves providing an industry with tax breaks. A reduction in taxes led to more Hollywood motion picture filming in states outside of California. Keeping the oil and natural gas industry in the U.S. can’t likely result from tax breaks alone. The energy sector relies heavily on private investment dollars.
Investors worry about seeing a return on their money. Under the law, Congress requires Master Limited Partnerships (MLPs) to issue 90% of generated revenue to shareholders. Otherwise, an MLP loses its tax-free status. The distributions of revenue, called “Freedom Checks” by some, may total more than $34 billion in one month alone.
Not everyone will experience the same results with an oil and gas MLP investment. It would not hurt to try and learn more about these opportunities. Individual investors may find these opportunities worthwhile.
Freedom Checks: Youtube