I can picture it now…
Two men are sitting in some dingy Texas saloon, finishing off their beers and getting down to brass tacks. A few million here, a few thousand acres there, a handshake, a round of whiskey…
And there you have it: a multi-million dollar deal.
These high-dollar mergers and acquisitions happen all the time in the oil business. Companies are always looking to find value for shareholders.
And there is no place where this happens more than Texas.
Just recently, ConocoPhillips — one of the largest exploration and production companies — announced it increased the estimate of its oil in place in the Eagle Ford shale to 2.5 billion barrels from 1.8 billion.
EOG resources, another big player in the Eagle Ford, recently did the same. Its resource potential grew to 3.2 billion barrels from just 2.2 billion before.
It’s numbers like these that have made the Eagle Ford shale of South Texas the place for land deals like the one I described earlier. There has been a frenzy of buying and selling in the region since it came onto the radar of oil companies like BHP Billiton, Devon, EOG, and ConocoPhillips.
Last year, the Eagle Ford led all other plays in deal making, with almost $9 billion changing hands. And some people are expecting that, by the end of this year, that number could be even larger.
Just last month, another one of these big-dollar deals took place.
This time, it was legendary oilman Clayton Williams, who sold assets accounting for about 5% of his company’s yearly production. He sold them for a whopping $71 million.
That deal is just one of many since the beginning of the year. And we can expect to see even more big-money deals just like this for the rest of the year as more E&P companies jockey for acreage in the Eagle Ford’s hugely profitable oil window.
Of course, my veteran readers know the land grab in Texas over the last few years took a sharp turn in 2009. That was the year ExxonMobil shelled out a cool $31 billion for XTO Energy.
Moreover, it was largely due to that XTO deal that Exxon’s natural gas production inside the United States more than doubled in 2010 to more than 2.5 billion feet per day.
Believe me, the company boosted far more than just its daily production. Exxon’s proved reserves of natural gas in the United States more than doubled to nearly 26 trillion cubic feet.
It makes you wonder what they’re preparing for… well, almost.
More Energy, More Problems
Over the next two decades, global energy demand will increase 41%. At least, that was the latest projection from British Petroleum’s most recent Energy Outlook 2035.
We’re on a roll, too. According the report, energy consumption during the last decade was the largest in volume terms over any other prior decade. Not surprisingly, it’s the non-OECD countries that are the culprits.
But are Exxon and friends getting beaten to the punch?
It isn’t a coincidence that China is cozying up to anyone capable of feeding its burgeoning natural gas addiction.
Putin is already a step ahead of the U.S. LNG exporters hoping to tap into the high-priced Asian LNG markets. Russian gas giant Gazprom is in talks to supply the Middle Kingdom with 38 billion cubic meters of natural gas per year by 2018.
All that’s left is to dot the i’s and cross the t’s.
So, where does this leave us?
Trading Secrets in the U.S. Oil Patch
I wish I could tell you that every individual investor is successful today. Sure, that used be the case in 2009, when you could blindly throw a dart against a wall of stocks and hit a winner.
Unfortunately, that simply isn’t the case right now. And the strong long-term profits that the widows and orphans have banked on Big Oil since the 1970s have been lukewarm over the last year.
Click Chart to Enlarge
You need more than lady luck on your side… you need a strategy. Compared to entrusting your money to the stagnant gains from Big Oil, having the ability to pick and choose your winners at random is a necessity in today’s stock-picker’s market — and you can see the difference clearly with just five of our past plays:
Right now, I’m putting the finishing touches on my new investment report highlighting the strategy my readers and I have used over the past year to pull in these profits… and you’ll have free access to all the details behind these trading secrets in 48 hours.
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.
