If your family is anything like mine, a holiday week is marked by relatives showing up at your doorstep.
I was looking forward to my uncle’s visit in particular. His flight from LAX got in early Monday, which gave me plenty of time to grill him on the news coming out of Santa Barbara…
With the potential for over 15 billion barrels of recoverable crude from the Monterey Formation, I was anxious to talk to him about it. My uncle is also the only life-long California resident I know.
He was pessimistic, to say the least. “I hope they choke on it.”
I can’t really blame his sour disposition, because an oil spill isn’t easy to forget — just ask anyone who used to fish in the Gulf of Mexico.
Four decades before BP’s debacle, and a full twenty years before the Exxon Valdez incident, the largest oil spill on record happened off the coast of Santa Barbara. In less than two weeks, roughly 100,000 barrels of crude spilled into the water after a blowout took place on an offshore platform.
So perhaps the question isn’t if California is due for a good, old-fashioned oil boom… but whether or not they even want it.
Fool’s Oil Rush?
Although shale fever has gripped parts of the other lower 48 states, California doesn’t have a strong track record for oil production.
At its peak, the state was pumping out more than a million barrels of oil per day. That was back in 1985.
Crude production has fallen 24 of the last 26 years (click chart to enlarge):
Believe me, California could use a new oil play.
More than three-quarters of the state’s dwindling production comes from Kern County. These barrels of crude are also of lower quality, having an API of 18 degrees or less. (The lower the API, the heavier the crude is. To give you some perspective, Bakken crude has an API between 40 and 42 degrees.)
Of course, the other piece that comes with a shale boom is hydraulic fracturing.
And if you think you’ve seen strong anti-fracking sentiment from the East Coast, California is on another level when it comes to environmental issues.
This makes things more difficult for Occidental Petroleum, one of California’s biggest drillers. The company has nearly 8,000 oil and gas wells statewide. There’s so much going against companies like Occidental, it wouldn’t surprise me if California’s future shale rush never occurs.
Besides, there are other oil booms giving investors more confidence…
I know one investor who has put nearly $10 billion on the line — and so far, he’s beaten Occidental every step of the way.
Investor Confidence
We’ve all heard a story or two of famous Texas oilmen. We at Energy and Capital have covered these legendary figures from time to time.
Right now, there’s another breed of oilmen on the rise…
I doubt if anyone had heard of North Dakota oilmen five years ago. Today their fortunes are surpassing their Texan counterparts.
And whenever the subject comes up, one name always springs to mind.
Some call him “Boss,” others might call him “Advisor,” but Forbes Magazine simply calls him “#35.”
I think it’s safe to assume the majority of readers would recognize Harold Hamm.
Hamm is at the helm of Continental Resources, one of the largest acreage holders in the Bakken. He also happens to be #35 on Forbes’ list of the “400 Richest Americans.”
Hamm’s Bakken bet helped him carve out his $9.6 billion oil fortune…
And Continental investors have had a leg up over California’s big drillers, like Occidental:
Since 2001 California’s oil production has fallen 24%, with an average yearly decline rate of 17%. At this rate, production will fall to zero well before 2050.
So unless Occidental and other drillers are able by some miracle to imitate the same kind of success North Dakota has enjoyed, things are looking bleak for the Golden State.
According to Hamm, more than 24 billion barrels of recoverable oil in the Bakken.
Despite daily production increased 435% during the last five years, output is still projected to top one million barrels per day before 2020.
And you don’t need to be a billionaire oilman to capitalize on this opportunity…
Individual investors like us can still have a front-row seat to this profit party. This report will help you get started.
Until next time,
Keith Kohl
Check us out on YouTube!A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.
For nearly two decades, Keith has been providing in-depth coverage of the hottest investment trends before they go mainstream — from the shale oil and gas boom in the United States to the red-hot EV revolution currently underway. Keith and his readers have banked hundreds of winning trades on the 5G rollout and on key advancements in robotics and AI technology.
Keith’s keen trading acumen and investment research also extend all the way into the complex biotech sector, where he and his readers take advantage of the newest and most groundbreaking medical therapies being developed by nearly 1,000 biotech companies. His network includes hundreds of experts, from M.D.s and Ph.D.s to lab scientists grinding out the latest medical technology and treatments. You can join his vast investment community and target the most profitable biotech stocks in Keith’s Topline Trader advisory newsletter.
