Short Answer
It can be attractive when you want real‑asset exposure, cash flow potential, and tax efficiency. It also carries geological, operational, price, and liquidity risks. Model both pre‑tax and after‑tax cases.
What It Means to an Investor
Direct participation can pair near‑term deductions with durable cash flow, but performance hinges on reservoir quality, execution, and commodity prices. Stress test type‑curves, LOE, different price decks, and tax effects from IDCs, MACRS, and 15 percent depletion.
