Applying Opportunity Zones to Oil and Gas Investments

How can the Opportunity Zone incentive be applied to energy investments in the oil and gas sector?

Matthew Iak is executive vice president of U.S. Energy Development Corporation and has overseen the capital raise of $1.5 billion since 2005.

Episode Highlights

• The appeal of the Opportunity Zone tax incentive in the energy industry, and why it works so well.
• Marketplace trends within the oil and gas sector, and the headwinds that the energy industry is currently facing.
• Why cost compression and lack of capital may create an investment opportunity in the energy sector not seen in decades.
• How oil well development on leased or purchased land meets the original use provision for Opportunity Zone compliance.
• How an energy investment can generate cash flow early in the development life cycle and take advantage of traditional oil and gas tax benefits in addition to the OZ incentive.
• How oil and gas exposure can create diversification in an investor’s portfolio.
• How the delay in receiving regulatory guidance and COVID resulted in a lackluster buy-in from the investment community.
• Why an Opportunity Zone investment can be likened to a “Super Roth” IRA.
• Why the Opportunity Zone exclusion benefit is so much more important than the deferral benefit.
• The composition of the capital base for USEDC’s Qualified Opportunity Fund and why they are having more success raising from RIAs and direct investors versus the broker-dealer channel.

You can listen to the podcast on The Opportunity Zones Database.