The Opportunity of Our Lifetime
Let’s talk about why multi-millionaires and billionaires are going to be created in the oil and gas business.
The big time investors have interns, research departments, and a huge edge.
Regular people don’t really have access to that kind of information.
We’re here to level the playing field for all the regular people.
Knowledge on Wall Street is power.
Our mission at themoneyman.com is to give you the same edge.
We do the work, you collect the money.
The biggest opportunity you’re going to have for the next decade is happening right now in the oil field. Yes, you heard it first here at themoneyman.com.
Major changes in how our country is run are already happening.
– An immediate stop to excessive EPA regulations of the oil and gas industry.
– Excessive regulations are going away.
This puts an end to the expensive legal and administrative battles against unwarranted regulations making development of profitable production much more attractive.
The additional business stimulated in all parts of our economy naturally give rise to additional demand for electricity and energy.
For years there have been rules against America exporting oil, which today make no sense at all as we become the biggest oil and natural gas producers in the world. Those obsolete rules are going away. Meanwhile OPEC is trying to raise oil prices through production cut agreements, which are failing.
As we fulfill our destiny as one of the largest producers of oil and gas in the world, removing the prohibition against selling oil globally will stimulate more demand, raise the prices of our domestic oil and gas, and give rise to additional building out of pipelines to transport products for export. This is especially good news for the exploration and production companies involved in these new low-cost plays in the Anadarko Basin in Oklahoma and Niobrara Basin in Colorado.
Since we can’t achieve perfect knowledge of everything about the oil business, we are focused on the Anadarko Basin in Central Oklahoma.
By the way, if you’re going to get rich in the oil business, you might as well know the jargon.
A play is the term for an oil field… The “SCOOP” and “STACK” plays in the Anadarko Basin are three times as profitable at today’s oil prices, compared to the shale oil in West Texas and North Dakota.
With West Texas Intermediate (WTI) oil prices seemingly stuck under a false cap of $50/bbl., exploration and production operators are challenged to find new opportunities to extend drilling inventories which generate economic volumes.
Valuations of Permian Basin plays in Texas remain high, which further limits opportunity to enter and add value. Overall, few plays present themselves as attractive for operators. Again, the SCOOP (South Central Oklahoma Oil Province) and STACK (Sooner Trend, Anadarko (Basin), Canadian and Kingfisher counties plays in central Oklahoma meet the criteria of promising economics, comparatively low acreage prices, and the potential for being the next growth wedge for operators. These plays are new to the unconventional game.
While they offer interesting potential, there are also risks associated with these plays and the ever-present possibility of the acquisition never paying for itself. However, operators have been successful in generating economic volumes through various well completions and configurations.
Our view is that despite the plays being in their infancy, relatively speaking their potential positive economics should be sufficient to sustain interest through the mid-term.
Lease activity in the SCOOP and STACK plays remains strong; stronger in fact, than in even the Permian Basin. This is partly driven by the higher acreage prices in the Permian Basin, but is also driven by the smaller average acreage positions.
The overall trend in leasing land is expected to remain high when many acreage holdings are set to expire in the upcoming 18 months.
The IHS outlook for the upcoming central Oklahoma plays is optimistic, though as always we caution that the play still has substantial delineation and de-risking left. But to date, results for these plays are trending in the right direction as the Trump administration is in the process of removing the EPA’s foot off the necks of our energy businesses right now.
As the world continues to need more oil and gas, while the low prices have caused the industry to slash supply, also it is just the time in the cycle when the oil industry is ready to really make people rich and it has made more people rich than any other industry. So much so, that when you see some new money billionaire in the movies he’s usually a stereotype oil man.
Notice, these guys didn’t get their hands dirty. They got rich owning oil and gas companies. Not working in the fields.
I’m going to share with you the knowledge that gave these guys the edge to make them rich.
It’s the oil and gas business.
In 2016 we saw the price of oil go all the way down into the twenties from $120 to $25. And you saw lots and lots of energy companies go out of business. We saw production being curtailed and drilling slowed to almost zero.
So at that point, nobody was interested in the oil business, and the best assets became really cheap. But the world still needs oil. All over the world, more people are getting electricity and it takes oil and gas to produce that electricity.
So this brings us to our favorite deal. Prices down, sour investor, and demand quietly growing.
This opportunity is happening in the oil business right now and it’s just getting started.
The energy business is getting much better and the part hardly anybody knows yet is the “SCOOP and STACK.”
Learn and read more about it. If your brain is able to learn how your sports team works and remember all your favorite team’s “STATS”, or if you follow a TV novella and you are very current about “who is getting married to who” then you can learn about the SCOOP and STACK of Oklahoma.
It’s very simple.
They just found two new unbelievably profitable, high pressure ribbons of shale oil only three miles below the surface in Oklahoma. The best part is almost nobody knows about it… YET. The development of the SCOOP and STACK is only in its infancy.
Some companies got lucky and already had land leases there, long before anybody knew the shale oil deposits were there. All these advantages are happening at the same time, and this has turned into the opportunity of a lifetime.
We did an in-depth study of exactly who are the smart and lucky companies who’ve managed to grab and monopolize those plays. One of the smartest companies, Marathon Oil (MRO) is selling off their Bakke properties in North Dakota and trading them for better, more profitable plays in Oklahoma. Marathon Oil is going to make a few smart people really rich.
We’ve shared a lot of insight into finding the best exploration and production companies with the most profitable positions right now in the Anadarko basin of Oklahoma and how billionaires understand the free market process. It’s easy to understand. This principle can make you a fortune over the rest of your life. Here’s how it works.
Large profit margins (easy money) attract more investment capital and more capacity. These early, smart businesses invest a lot of capital into new production. Eventually, people hear about investors making money in the sector, which becomes increasingly stylish. This is happening now in the Anadarko Basin.
Now the sector is attracting more investment capital as asset prices increase, driving up the stock prices and the “buzz” gets louder. The financial news pundits start talking about how “hot” the sector is. Investment bankers see all the excitement and capitalize on raising easy money for even more sector investment. Everybody wants to get in on the action after they’re seeing it on television. In every cycle, when you see the excitement on TV and the investment bankers are pushing it, THAT’S YOUR FIRST WARNING.
At this point, the smart money like the Blackstone Group is thinking about taking private companies public and selling out. Still, that excitement attracts more and more capital. And eventually with all that capital flowing in, you get product capacity growing faster than demand for the end product. This is the kiss of death for the sector. Once the stock prices are going up faster than the price of the assets, it can only end one way, in a crash.
Remember, the first warning sign was when they started talking about it on TV and the investment bankers got into it. That’s what happens every couple of decades in the energy business and we saw it happen in 2014. The big crash that eventually made so many people rich was way back in 1985. Remember $10 per barrel oil?
These cycles end with the crash because now there’s too many assets being produced and there’s no pricing power for the assets. Since there is no pricing power, prices start to go down and the industry gets more competitive. The companies that borrowed a lot of money have to start cutting prices to keep sales up in order to try and pay their bills. These “cash weak” companies start going out of business because they can’t make their debt payments, fire sales start and companies start to disappear, reducing asset production.
This is exactly what we all saw in oil back in 2016. Oil went to $25/ barrel and down to $10/ barrel in 1985. That is when oil people who knew how the game works got really rich, and that same opportunity is happening again right now.
That’s my story for now, I am sticking to it.
See you next time.