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The Big Oil Price Spike Payoff |
May 20, 2008 By Tobin Smith, Editor, ChangeWave Investing |
Tobin Smith
Tobin Smith is the founder and editor of ChangeWave Investing. He also serves as executive editor of ChangeWave MicroCap Investor, and contributes his weekly market outlook and editorial rants to ChangeWave's WaveWire e-letter, which is read by more than 250,000 investors each week.
If this field even lives up to the lowest of the more-optimistic estimates, this field could rival the production of fields you'd find Saudi Arabia.
The Same Old Story?
But wait, you say. Haven't we heard this story before? Isn't almost every new find a Saudi-sized discovery?
Perhaps, but something more than hype is making this area the latest region to be transformed by a "black gold" rush.
Companies like Halliburton (HAL) and Schlumberger (SLB) have set up shop in the northern Plains and stories are beginning to surface about farmers collecting seven-figure royalty checks quarterly from finds on their properties. In the last year alone, the number of rigs drilling in the region increased 50% from 300 to 450.
EOG Resources (EOG) is drilling in the Bakken area and has a single well that it expects will produce 700,000 barrels of oil during its lifetime. Montana's Elm Coulee field in the region has been producing 15 million barrels annually since 2005.
As the crude supply tightens due to demand growth around the world—especially in emerging countries like China and India—oil will establish new, higher price ranges that will make once-uneconomic methods become feasible and profitable for oil companies.
The "crude reality" is that we need all the oil we can find as the supply-demand equation works against prices returning to the $50 - $70 per barrel range. New discoveries of this size provide a significant opportunity for investors looking to make money in the energy patch.
The question is whether you will continue to spend your time complaining about the rising price of oil … or profit from it!
Forget about the price of oil! You need to focus on the great secular growth areas of the global economy where investors can make some nice profits in '08. Want in? Just sign up for your 90-day, risk-free trial subscription to ChangeWave Investing! We specialize in unconventional energy plays from alternative technologies to the biggest beneficiaries of the Bakken shale story. Try ChangeWave Investing risk-free for 90 days.
