Did you know that Revenue Canada allows you a deduction of up to 100 per cent for oil and gas drilling costs from your personal or corporate income?

Probably not.

This amazing tax benefit is one of the best-kept secrets in Canada.

One person who has known about it for decades is Calgary entrepreneur Larry Darling.

It's also Darling's business to enlighten folks about this alluring tax advantage.

Larry Darling says there has never been a better time to invest in oil and gas.

Darling's Alberta company, Enhanced Resources, specializes in showing investors how to make the tax break work for them while making prudent joint-venture investments in the oilpatch.

For 25 years, Darling has been providing investors with oil and gas properties for joint ventures that offer tax relief.

The Income Tax Act has provisions for individuals and corporations, within and outside the oil and gas industry, to drill potential wells utilizing tax incentives. Any and all Canadian individuals and corporations, not just oil companies, can deduct the costs of drilling wells from ordinary income.

As an example of how any entrepreneur can save a bundle on taxes, Darling tells the story of how Peter Krebbs invested $50,000 in a wildcat well in north-central Alberta.

The total well costs were $750,000, including land costs, so Krebbs wound up with five per cent of a discovery well, which will pay him quite handsomely. He was told he should expect about eight times his initial investment over the next 10 years.

But here's the part most people don't know about. The well qualified as an exploratory well, so Krebbs deducted 75 per cent of the $50,000 investment from his gross income. He also deducted 25 per cent of the remaining $12,500 for his portion of the equipment costs.

If this had been a development well, his deduction would only have been $15,000 (30 per cent of $50,000) and he would have received the same equipment deduction.

"The tax advantages of investing in oil and gas joint ventures can be large," says Darling, who has drilled and completed more than 250 wells in his 40-year career in the oilpatch, primarily in the Western Canadian Sedimentary Basin.

"However, the list of oil and gas joint ventures from outside the oilpatch is still relatively small," adds the seasoned entrepreneur. "Even so, over the past decade, several huge pension and trust funds, as well as some of the large insurance companies, have participated in these joint ventures."

Darling is also quick to point out that more than a few oil well service and supply businesses have ventured into the fray.

"Wealthy individuals and a small number of individual investors who are not so wealthy have also invested in the joint ventures. And businesses not associated in any manner with the oil industry are starting to make inquiries."

Darling has also noted a significant increase in investing consultants who are introducing their clients to this type of oil and gas financing.

"Why wouldn't they?" enthuses Darling. "Let's face it. The mutual fund business has not been their friend over the past several years. And the rates of return from joint venture farm-outs within the oil industry appear much more interesting than the sorely discounted mutual funds."

Darling believes the time is right for investors to take advantage of a thriving oil and gas industry now while enhancing their tax breaks.

"It's up to you to decide whether your tax money should go directly to Ottawa to get lost in their bottomless pit or to have the possibility of receiving a good return on your investment," says Darling.

"There are over 500 rigs at work, crude oil prices are high and natural gas has become a premium commodity. Opportunities for those wishing to participate in the drilling boom in Alberta is at an all-time high."

Calgary financial adviser John Fahie is among those who have participated in a drilling joint venture that has paid off handsomely from a pure investment perspective and a tax perspective.

Fahie participated in a farm-out to drill a shallow gas well in east-central Alberta, investing $20,000 for a 3.75-per-cent working interest in the project.

The well is now a producing gas well and, thanks to the escalating price of natural gas, he will receive his investment back in less than 15 months from the time of the initial investment. He also expects to receive over $100,000 in the next seven years.

"This is one of the best investments in Canada," says Fahie. "Why hadn't I heard about this type of write-off sooner? I believe Canadian investors need more education about this great write-off. We also need more knowledgeable contacts in the industry to help us to understand the risk and take advantage of what is really the best tax write-off in Canada."

Author and speaker Larry Darling is one of Canada's leading authorities on the subject of investing in the oil industry while triggering major tax breaks.

If an investment in a hot sector and tax savings sounds interesting to you, give Larry Darling a shout. Hey, he's not known as the entrepreneur's entrepreneur for nothing.