What if one investment could potentially reduce your tax bill today and generate income tomorrow? Oil and gas investing might not be as out-of-reach — or as risky-as-you-think.
In this episode of The Agent of Wealth Podcast, co-host John Williams is joined by Courtney Moeller, an oil and gas investor, entrepreneur, and Navy veteran who helps high-income earners reduce their tax burden and build passive income through alternative investments.
In this episode, you will learn:
- How oil and gas investments can potentially offset W-2 and active income through powerful tax advantages like Intangible Drilling Costs (IDCs).
- The key risks involved in oil and gas investing, including drilling outcomes, oil price fluctuations, and deal structure.
- How to evaluate opportunities, from choosing the right operator and basin to understanding breakeven prices and diversification strategies.
- Why oil and gas still plays a critical role in the global economy — far beyond just fueling your car.
- And more!
Tune in for an inside look at how oil and gas investing works, who it may be right for, and how it can fit into a broader financial strategy focused on tax efficiency, diversification, and long-term wealth building.
Resources:
ironhorseenergyfunds.com | courtneymoeller.com | Bautis Financial: 8 Hillside Ave, Suite LL1 Montclair, New Jersey 07042 (862) 205-5000 | Schedule an Introductory Call
Disclosure: The transcript below has been edited for clarity and content. It is not a direct transcription of the full episode, which can be listened to above.
Welcome back to The Agent of Wealth Podcast, this is your co-host John Williams. Today, I’m joined by a special guest, Courtney Moeller.
Courtney is an oil and gas investor, entrepreneur, and Navy veteran who helps high-income earners reduce their tax burden and build passive income through alternative investments. Having grown up in Midland, Texas — right in the heart of the oil and gas industry — she brings both generational knowledge and firsthand experience to how energy investing actually works.
Courtney focuses on helping investors access opportunities that can potentially offset active income, generate ongoing income streams, and diversify beyond traditional stocks and real estate.
Courtney, welcome to the show.
Oh my gosh — yes, John. Thank you so much for having me. It is such an honor to be a guest.
I’m really excited for our conversation today. We had a chance to chat a little bit beforehand, and I was mentioning how much interest there is in this topic right now — not just oil and gas specifically, but alternative investments in general. I think there’s also been a surge in popularity because of TV shows.
Funny enough, I had a client who recently got involved, and he said, “I think Landman had a lot to do with my interest.” I’m sure you might even be a little sick of hearing about it, given that you’re in the business — but it’s a pretty cool show…
No, it’s so cool. It’s where I’m from, so I was really excited when it launched. And honestly, I don’t think a day goes by that somebody doesn’t bring it up. It happens every day — but it is a great show.
Yeah, I probably should have asked you beforehand, since it’s something people bring up all the time. But many times, clients come to me — and I call it a good problem to have — they’re making too much money.
When it comes to ordinary income, there are very few ways to reduce it, especially for passive investors. So I’d love to lay some groundwork and have you tell our listeners a bit about your background — growing up in Midland, Texas — and how that shaped your perspective on energy investing today.
Sure. Well, you’re right — everybody comes for the taxes.
It’s funny — when I was younger, growing up, I never thought I would end up in the oil and gas space. But it’s something I’ve been around my entire life.
My father was a petroleum engineer. My brother drilled oil. My sister hauled pipe out to rigs. My uncle has a well-servicing company. Not only did we have roots in Midland, but we also lived abroad — my father drilled in the United Arab Emirates and Pakistan, and then spent 20 years in Jakarta before he retired.
So this industry has always been a part of my life. I remember sitting at the dinner table listening to my brother talk about tripping pipe and moving rigs. It was just normal for us.
In 2011, when my dad passed away, I inherited his oil and gas company. We continued drilling with companies like SM Energy and ConocoPhillips throughout the Permian Basin. We own a lot of mineral acres and similar assets.
It wasn’t until years later that I started looking to diversify out of oil and gas and into other asset classes. I quickly realized that my income was heavily dependent on the price of a barrel of oil.
During that journey, I learned about alternative investments — like people buying apartment complexes — and my mind was blown. I thought I’d start putting together real estate deals myself. But then I realized I didn’t even know what CapEx was. There were so many things I didn’t understand.
So I decided to stick with what I knew and what I was good at.
My father spent his entire life building relationships with companies like Exxon and Shell. I thought, “Why not leverage those relationships and my knowledge to bring an asset class to investors that offers substantial tax benefits and income potential?”
That’s my story in a nutshell — and now, that’s essentially what I do.
Maybe just to go a little deeper — I’m curious about your experience in the Navy and how that ultimately led you to where you are today.
Well, growing up, I always had a bit of “shiny object syndrome.” I could never quite figure out what I wanted to do, and I tried a lot of different things.
At one point, my mom suggested I join the military. My first reaction was, “What? That’s a man’s job — I’m not doing that.” But I explored it anyway. I looked at the Air Force, but ultimately, the Navy gave me a better offer.
They initially wanted me for the nuclear program, which I wasn’t interested in. But avionics caught my attention. I had already been studying computer operations, maintenance, and software, so it aligned really well.
For those who don’t know, avionics involves all the computer systems within aircraft. When something broke, it came to my shop to be repaired.
I spent all of 2003 in the Persian Gulf during Operation Iraqi Freedom. Looking back, I was young and unsure of my direction, but the Navy gave me discipline and helped shape my path.
After I got out, I became a realtor and eventually opened my own real estate agency. I thought that was what I would do forever.
But when my dad passed away, everything changed. I never expected to end up in oil and gas, but inheriting the company opened up new opportunities. It also forced me to learn the business at a much deeper level.
I understood drilling, but I didn’t fully grasp acquisitions, expenses, and other operational aspects. Over time, I developed a well-rounded understanding of the business from start to finish.
And honestly — I love it. I’ve learned so much along the way. I just wish my dad were still here so we could talk about it. I know he’d be really excited.
Yeah, thank you so much for sharing that. I’m sure your experience in the Navy — and the discipline that came with it — played a big role. I imagine you’ve got plenty of stories there that we’ll save for another time.
But I do want to lay some groundwork for listeners, especially around the challenges of reducing ordinary income. Outside of something like a 401(k), there are limited options.
I’ve identified a few areas where opportunities exist, and oil and gas is one of them. So I’ll hand it over to you — can you walk us through, at a high level, the tax advantages and how they compare to things like capital gains?
Absolutely. I’ll start with the “why.”
A lot of people don’t realize just how essential oil and gas are. If you’re watching Landman, you’ve probably heard this — Tommy does a great job explaining it. Nearly every industry depends on oil and gas in some way.
Because of that, the U.S. government stepped in and said, “We know drilling is risky, so we’re going to provide tax incentives to encourage it.”
These incentives have been around for decades — close to a century, actually. They’re not new, but many people still don’t realize they exist.
The first — and most popular — benefit is Intangible Drilling Costs (IDCs), which provide year-one tax advantages.
When you invest in drilling a new well, IDCs include things like fuel and labor. These costs can potentially offset W-2 income, active income, and even capital gains.
So I work with a lot of business owners, real estate sellers with large capital gains, and high-income professionals like doctors who are looking to reduce their tax burden.
By investing in a drilling deal, they can receive those year-one tax benefits.
The second benefit is the depletion allowance. This allows about 15% of the ongoing income from the wells to be tax-free each year for the life of the asset.
So you get both a strong upfront tax benefit and ongoing tax efficiency.
To give listeners a clearer picture — what might that look like in year one? Let’s say someone invests $100,000. What kind of impact could that have on their taxable income?
That’s a great question, because it can vary depending on the deal and how the funds are allocated.
The more capital that goes toward drilling, the higher the potential intangible deductions.
For example, in our most recent deal — which closed in December — we passed through a 95.6% intangible drilling cost tax benefit to investors. That resulted in a 95% K-1 loss.
So if someone invested $100,000, they received a $95,000 loss. Let’s say they earn $500,000 annually. After applying that loss, their taxable income drops to $405,000. Depending on their tax bracket, that could translate to roughly $30,000 to $38,000 in tax savings — money they don’t have to pay to the IRS. So the impact can be pretty substantial.
And is there any risk of recharacterization, or any need to recapture that tax benefit later? What should investors be thinking about on that front?
I would say, first of all, you need to make sure that the deal you’re investing in is structured properly.
You have to come in as a general partner with unlimited liability. The tax code states that this is not considered a passive investment. One of the other advantages — compared to real estate — is that, typically, to take active losses in real estate, you have to materially participate. That’s not the case in oil and gas.
You come in as a general partner, take on that unlimited liability — which we can talk more about later — and it’s really not quite as scary as it sounds, depending on how you invest.
The other thing to consider is whether the investment is planning an exit. If it is, you could potentially have recapture. You need to make sure the deal is exiting at less than the adjusted cost basis.
For example, let’s say it’s a $100 million deal and there was a 95% K-1 loss. That means you can’t sell it for more than $5 million without triggering depreciation recapture.
So we’re very intentional about that. We aim to deplete the majority of the oil and then exit when only a small amount remains, because taxes are a major consideration for us. It’s just something investors should be aware of.
You mentioned earlier how your familiarity with oil investing comes from your upbringing. I think that’s one of the more intimidating aspects for many people — not everyone has that background.
Real estate feels more familiar because we all live under a roof. Many of my clients who are real estate agents tend to invest in real estate because they understand it — they’re comfortable with it.
You also mentioned that oil and gas investing isn’t as scary as it sounds. And often, it’s more about diversification, right? Not everyone is going all-in on oil.
So maybe you can address some of those perceived risks, and at a high level, explain what makes oil and gas investing fundamentally different — and how it fits into a broader portfolio.
Yeah, I think the biggest concern people have is drilling a dry hole.
It can cost millions of dollars — sometimes up to $10 million — to drill a well. That’s a generalization, of course. Shallow vertical wells can be cheaper, while longer horizontal wells can be more expensive.
But the point is, it’s expensive. And if you invest millions into a well and there’s no oil, that money is gone.
Yes, you still get the tax benefits — but nobody wants to invest just for tax benefits. You want your money back.
What’s changed significantly over time is technology. The introduction of horizontal drilling and fracking a couple of decades ago really transformed the industry.
We prefer to drill in what I call “Tier 1” basins — places like the Permian Basin and the Bakken. These are areas that many people are familiar with.
If you’re drilling horizontal wells in a Tier 1 basin, the success rate is over 90%. The likelihood of drilling a dry hole is extremely low — almost nonexistent.
Personally, I prefer horizontal wells over vertical wells. They’re more expensive, but the success rates and oil recovery rates are significantly higher.
Another important consideration is how the deal is structured. Are you funding the entire project, or just a portion? Are you investing in a single well, or a diversified group of wells?
I’m a big believer in diversification. I don’t like single-well projects — you’re putting all your eggs in one basket. And while I always want to root for smaller operators, I prefer working with companies like Continental Resources and EOG. These are large, multi-billion-dollar companies — many of them publicly traded.
People talk a lot about “skin in the game.” These companies have almost all the skin in the game — it’s their project. If they’re investing $50 to $100 million into drilling, I trust that they’ve done the geological work.
I like coming in and taking a small percentage of those projects.
So when evaluating oil and gas investments, you need to ask:
- Why am I doing this?
- Is it for tax benefits?
- Cash flow?
- Long-term upside?
Then find a deal that aligns with your goals and risk tolerance.
There are definitely higher-risk, higher-reward opportunities — but there are also more conservative, steady options. Nothing is guaranteed.
And in oil and gas, there are two key factors no operator can control: the price of oil and how the wells perform once they come online.
It doesn’t matter if you’re Exxon or the smallest operator — no one controls those variables.
So it’s important to invest in projects that can withstand lower oil prices.
We could go down that rabbit hole for hours.
I’m sure you could — and you’re right, due diligence is everything.
What you’re describing also helps explain why these tax benefits exist in the first place. They’re meant to compensate for the level of risk and incentivize investment.
It’s easy to look at big oil companies and focus on their success. But I remember when oil prices were rising around 2021, I started digging into the industry — upstream, downstream — and it’s incredible how much complexity and risk is involved just to get oil from the ground into your gas tank.
What we tend to see is the success — but not the failures. We don’t see the dry wells or the capital losses.
So with that in mind, if someone is interested in learning more, what risks should they be aware of? And what should they look for when evaluating opportunities?
Yeah, I’d say the first two things to focus on — just like real estate — are the operator and the location.
Who is drilling the well, and where is it being drilled?
As I mentioned earlier, I prefer Tier 1 basins — areas with proven oil reserves.
Then you evaluate the operator:
- What’s their experience?
- How many wells have they drilled?
- How many are currently producing?
- Have they drilled in that specific region or geological formation?
Drilling in the Permian Basin is very different from drilling in Wyoming, Oklahoma, or North Dakota. Each region has its own complexities.
If I’m working with a company like Exxon, I don’t need to do much background research — I already trust their track record. But with smaller operators, I absolutely do due diligence. I look at their well history, production data, and overall experience.
The next key factor is the breakeven price — at what oil price does the project remain profitable?
For many smaller operators, that might be around $60–$65 per barrel. In 2025, that was a challenge — many had to shut down operations.
Larger companies often have breakeven points in the $30–$40 range due to economies of scale.
Are you referring to WTI?
Yes — WTI, or West Texas Intermediate.
And I should clarify that, because not everyone is familiar: WTI is the benchmark for U.S. oil pricing. Some people reference Brent crude, which is used internationally.
So that breakeven price is critical.
Beyond that, there are many additional factors — like the number of wells, whether they’re vertical or horizontal, and so on.
We actually use a due diligence checklist. A deal has to meet our top criteria before we even consider moving forward.
It’s interesting — when WTI drops, I’m excited as a consumer, but for investors, that increases risk.
You not only need to find oil, but prices also need to stay above a certain level for the investment to be profitable.
Exactly — that’s the breakeven price.
If your breakeven is $40 and oil drops into the $50s, you’re still okay. But if your breakeven is $65, you could be losing money — or even writing checks to cover operating expenses.
I remember during the pandemic when oil briefly went negative. Weren’t people being paid to take oil?
Yes, but that was a very short-term anomaly tied to futures contracts and storage constraints. It rebounded quickly.
And importantly, those daily price swings don’t directly impact operators the way people think.
Most operators lock in contracts — 30, 60 days out — so they’re not selling oil at spot prices daily.
That drop didn’t impact any of my deals. It was too brief, and contracts were already in place.
That makes sense. So maybe someone else was losing money — but not you.
Let’s shift gears to cash flow. What can investors expect?
This is where oil and gas can really shine.
In real estate, you often receive quarterly distributions, and the biggest payout typically comes at exit — five or more years later.
With oil, you often recoup your investment more quickly. The higher oil prices are, the faster that happens.
We’ve been in a bit of a bear market, so returns haven’t been as strong recently — but you can still recover capital relatively quickly and redeploy it.
That’s actually my strategy: invest in oil, take the tax benefits, recover the capital, and then reinvest into real estate.
Interesting.
And the cash flow is typically monthly, though every deal can vary.
From what I’ve seen personally, I was surprised how quickly payments began — just a few months after the initial investment.
But the key point is this: you have to do your due diligence.
Understand what you’re investing in and how it fits into your overall financial plan.
You don’t want to chase tax benefits alone. Those are just a bonus — they won’t carry the investment on their own.
The investment itself has to make sense first.
Before we wrap up, are there any common misconceptions about oil and gas investing you’d like to address?
One of the biggest misconceptions is that renewable energy and electric vehicles will eliminate the need for oil and gas.
There’s been a strong narrative around that — but recent global events have highlighted how dependent we still are on oil.
What many people don’t realize is that even renewable technologies rely on oil and gas.
Tires, plastics, electronics, medical equipment, cosmetics — oil is involved in producing all of it.
A single barrel of oil contains about 42 gallons. Roughly one-third goes to gasoline, one-third to diesel and jet fuel, and the remaining third is used in over 6,000 everyday products.
So it’s far more than just fuel for your car.
Yeah — and I’ll bring up Landman one more time. There’s a scene where he explains how even wind turbines depend on oil-based materials.
It really is eye-opening.
Exactly.
One quick question — does that breakdown vary based on the type of oil?
Yes, there are different grades of oil. For example, Venezuela produces heavy crude, which fewer refineries can process. The U.S. produces lighter, sweeter crude. Other regions use different grades.
We actually export much of what we produce and import a significant portion of what we use — about 60% from Canada, with Mexico as another major source.
It’s often cheaper to import the type of oil we need than to refine what we produce.
Different fuels require different refining processes — similar to how you wouldn’t put diesel in a gasoline engine.
That makes sense. It’s fascinating how complex the system is.
It really is.
I could talk about this all day, but let’s wrap up. Where can listeners learn more or stay in touch?
Thanks for asking. I publish a newsletter where I break down what’s happening in the oil market and help people interpret the bigger picture.
We’re also about to launch our next diversified oil and gas fund, which I’m really excited about.
You can visit ironhorseenergyfunds.com for more information. I’m also on LinkedIn, and my website is courtneymoeller.com.
Great. We’ll link to that in the resources section of the show notes. Thanks again, Courtney. And thank you to everyone who tuned into today’s episode. Don’t forget to follow The Agent of Wealth on the platform you listen from and leave us a review of the show. We are currently accepting new clients, if you’d like to schedule a 1-on-1 consultation with our advisors, please do so below.
Bautis Financial LLC is a registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.
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