Oil and Gas Investment – What You Need To Know

oil and gas investments
The oil market can be very confusing to both the professional and individual investor, with large price fluctuations sometimes occurring on a daily basis. This article explains the forces driving the market and how to have a financial stake in oil-price fluctuations without opening a futures account.

Oil and Gas Investment

In order to explore the best investment opportunities, you should search for the sectors that will ensure a stable and steady income. Oil and gas are considered as the sectors that have produced a good return for a long time. It is impossible to imagine an emerging economy to survive without oil, which is considered as a natural resource. There are over 2 million applications used with the molecule of oil. This is the reason due to which the global consumption of oil has increased to a significant extent that is resulting in a high demand for the oil and gas investment.
There are many oil and gas refineries which are known to provide crude or enhanced products to the required places. These refineries help to maintain an easy flow of oil and gas producing many quantities of barrels per day. Apart from providing the continuous supply of oil and gas, these refineries also prove out to be one of the best sources of investment.

Way of Investing in Oil and Gas

You can approach oil and gas investing in a number of different ways. For example, you can consider the industry a collection of companies providing products or services to consumers, as well as to other players in the oil and gas industry itself. Like:
Below is a list of five basic investment vehicles:

  • Stocks in Oil Companies
  • Working Interest Partner in a Drilling Program
  • Existing working interest in a lease.
  • Stock in royalty trusts
  • Oil and gas royalties direct from mineral owners.

So look at your investing needs and pick the investments that are suitable to you.

Oil and Gas Market in USA

One of the major problems the oil market faces is the lack of high-quality “sweet” crude, the type of oil that many refineries need to meet stringent environmental requirements, particularly in the United States. Much of the high-quality oil imported into the United States comes from Nigeria and surrounding African nations; according to the U.S. Department of Energy, together, Nigeria and Angola exported more oil to the United States than Saudi Arabia in 2007.
The content of this article is provided by Shawn Bartholomae. Shawn Bartholomae is the senior partner of Silver Tusk Oil and CEO of PRO AK.

Prodigy Exploration Inc. LLC, CEO Shawn Bartholomae weighs in on export ban

As the price of oil began its descent last year in the waning months of a spectacular boom year, Shawn Bartholomae, the CEO of Prodigy Exploration Inc. LLC remained optimistic. He had stated very early in the event of the price plunge that he could see, as much opportunity as there was danger.

Many of the players came to agree with him. The logic expressed by Shawn Bartholomae is solid. The best cure for low oil prices are the low prices themselves. It is the competitive prices and costs associated with drilling the oil and gas wells that have dropped and will continue to drop as long as the depressed prices are part of the industry. The CEO of Prodigy Exploration Inc. has history on his side. With careful planning and thoughtful allocation of resources, it is a time to secure leases and drilling rights. In many ways to dropping of prices makes the investments related to securing these leases and establishing production contracts more appealing, not less.

It is the margin between the cost of oil and the costs of producing this oil and gas has been the focus of the planning of the CEO of Prodigy Oil and Gas. What is encouraging to many of the analyst in the oil and gas field is the realization of the full extent to which the oil and gas industry has been a mainstay of the recovery and the entire economy. Fully half of the new jobs created during the recovery were in Texas. Nearly all of these jobs were related to the prosperity that the revenue flows of a dynamic oil and gas industry has produced. Not only does the industry speak well for the general economy, but also any analysis will reveal that the health of the petroleum industry is critical to the nation. There are few parts to this economy that can affect the people as much as the petroleum industry. When the oil and gas industry ails, the entire economy feels the pain. The only realistic conclusion is that the nation will quickly remedy any weak spots in this very vital industry.

The shift from current policies, such as those related to exports, will tend to favor the petroleum industry. Politicians keeping a keen eye on the economic health of the nation will tend to set the scene for rulings that will strive to keep the economy healthy. Congress will take measures to keep this most vital and critical segment of our economy in good graces. These new laws and the new environment they create will serve the industry long after the price slump has subsided. The overwhelming sentiment now in business and political circles is “lift the ban”. This is likely to happen.

In a sense the “perfect storm” conditions that are setting the stage for a magnificent bull run are taking shape. This scenario aligns perfectly with the planning and thinking strategies of Prodigy Exploration CEO <b>Shawn Bartholomae</b>. His assertions that the timing ‘could not be better” for investments in petroleum production appears to be right on target.

Few considerations for the long-range health of the nation’s energy as well as the security of the nation are as important as the export laws. While the oil and gas produces have long called for a repeal of the export ban, these pleas have fallen on deaf ears. The new ally in the push for the repeal of the export ban is the lower prices themselves. The term “Too big to fail” applies especially to our nation’s oil industry. As congress goes conservative, the “open for business” atmosphere that has seen Texas lead the nation in jobs created and prosperity now has a chance to go nationwide. If the entire nation were to make the same dramatic rise in production and prosperity as the state of Texas, the United States would find that we have emerged into a new era of petroleum prosperity and the resultant national security. This is a condition that will far outlive the temporary slump in oil prices. This atmosphere of a national open for business atmosphere is likely to follow as conservative leadership takes the rein in the senate and house. Added momentum is likely to come when the conservative factions take the executive office also. A conservative leadership in the nation will call upon the oil and gas industry to lead the recovery in the energy field.

It is the preparation for the changing conditions that the leaders of vision in the oil and gas industry are preparing for.

Senator Lisa Murkowski, Republican from Alaska, is due to become the chairperson of the Senate energy committee. She is adamant when she endorses the move to lift the export ban. A quote from a representative from her office states, “Senator Murkowski continues to believe that the most efficient way to ensure America’s energy competitiveness is to allow the free trade of oil in the world market”

This comment and the suggested policy send a clear signal that the lifting of the export ban is in the works.

Most analysts concede that lifting the ban on exports would help producers in the United States by closing the gap between the price of Brent crude oil and the United States crude oil, which is referred to as West Texas intermediate. Historically this gap stays at the $4.00 range. By lifting the export ban, the moves will tend to keep the industry worldwide more competitive. The ultra light oils that are a trademark of the shale industry will serve the nation well as this light oil is easer to process and leaves refiners with a higher profit margin.

The lower revenues from the taxes being paid to government at the state level are felt immediately. The incoming Texas comptroller, Glenn Hegar, has voiced concerns about the lowering of these oil and gas related sources of revenue. The lowering of the prices and the resultant loss of revenue makes legislators face a reality that analysts cannot avoid. This reality states that without the continued strong flow of capital from a strong Texas petroleum industry, government functions at critical levels will suffer. Many state governmental budgets had apparently become complacent and had taken the high revenues from the healthy oil and gas industry for granted.

There were numerous projects and investments that had long range state beneficial aspects to them that were passed during the wave of prosperity. The commitments that were made to develop the infrastructure and the education funding were of a nature that they cannot exist without the underlying support of a strong oil and gas industry. The reality of the new level of revenues could well prove to be a blessing in disguise. The blessing will come in the new awareness of just how much the state and the nation needs a strong and prosperous oil and gas industry.

The benefits of Texas oil and gas production have touched the state economy at all levels. Our state is stronger today because of shale development .As this awareness of what Texas and the petroleum industry have achieved, the potential for a new petroleum environment nationwide grows stronger. Studies have consistently shown that increased production has in the past and will continue to increase the GDP, growth in employment, and capital investment. If the nation as a whole can emulate the success story of the “Texas Miracle” then it would herald the arrival of an entirely new age of American prosperity and security.

The prospects for the change in national energy policies and the realities of a more conservative and businesslike government taking form validates the outlook of Prodigy Exploration CEO Shawn Bartholomae who has stated “Now is the time to secure production and drilling contracts. The long-term benefits are superb. We will continue drilling to establish as much production as possible. As a small company we are perfectly positioned to do just that”

The CEO of Prodigy Exploration and senior partner of Silver Tusk Oil Co. goes on to state that the timing for an entry into oil investments is now. All of the conditions are being set for the longest Bull Run to have ever occurred in the oil and gas industry. “The timing for this move could not be better”

Past history will validate and confirm the conclusions of this CEO of Prodigy Exploration Inc LLC, <b>Shawn Bartholomae</b>. The indicators of history, economics and politics are aligning in perfect order and timing to make the ideal scenario.

Shawn Bartholomae, senior partner of Silver Tusk Oil Co. comments on 2015 petroleum production outlook

In the bigger economy, the most conclusive analysis of the expectations of the oil situation and the 2015 market is often one big question mark. The complexities of the world situation will remind the analysts of the inter connectivity of the world. Any one element in the total equation has the potential to grow in importance and serve to minimize the other considerations.
Shawn Bartholomae states “It is this inter action of so many factors that makes the outlook for the market in 2015 so complex. As the senior partner for Silver Tusk Oil Co., this executive is well aware of the potential of the future of world oil production to be greatly swayed by any number of potential events.
EIA (Energy Information Administration) offers the following analysis:
“With price volatility high and markets in flux, small changes to fundamentals or perceptions can cause prices to shift rapidly. Several factors could cause oil prices to deviate significantly from current projections. Chief among these is the responsiveness of supply to the lower price environment. Despite OPEC’s recent decision to leave its crude oil production target at 30 million bbl/d, if crude oil prices continue to fall, Saudi Arabia and others could choose to cut production in order to tighten market balances. The level of crude oil production outages could also vary from forecast levels for a wide range of producers, including OPEC members Libya, Iraq, Iran, Nigeria, and Venezuela. Additionally, the price and lag time required to cause a reduction in forecast non-OPEC supply growth, particularly U.S. tight oil, could be longer or shorter than expected. The degree to which non-OPEC supply growth is affected by lower oil prices will also affect market balances and prices. Finally, consumption could turn out to be more responsive to lower oil prices than anticipated. How these factors evolve over the next several months will shape the market both in 2015 and beyond.”
The senior partner of Silver Tusk Oil Co., Shawn Bartholomae states that the industry could hope for an era of price stability. “It is the relative stability that would allow drillers and producers of petroleum to make their energy investment plans for the long term”.
“It could potentially take from a few months to perhaps a year for the lower oil prices to feed through the global economy,” states noted analyst Fawad Razaqzada at trading site Forex.com. The actual number of analysts who go on record as predicting a long-term recession in oil prices and production activities appear to be in a minority. The more optimistic assessments seem to suggest that the oil prices should stabilize in a few months. .
The sudden drop in oil prices got acceleration when, in late November, the Organization of Petroleum Exporting Countries, OPEC, had decided against cutting its oil production despite the falling oil prices. Analysts would note that the market has to respect the viewpoints of a cartel that produces fully one third of the world’s oil. As weighty as the OPEC opinion is, it is a far different situation from the times in recent decades when the OPEC production was more than one half of the world’s oil output.
If the long-term strategic objectives of the Unites States were to deflect the center of gravity for the oil powers and the control of resource production away from a highly volatile and uncertain Middle East and to bring the critical resources of oil production closer to home, then it would appear that these objectives have been met.
Many analysts had stated that they preferred the lower prices in spite of the dropping income levels it brought. They had viewed this drop as a counter weight to United States shale production, which has a high per barrel, cost to it its production.
However as the world has to balance its checkbooks, the shale producers in the United States are far from being the only ones who need more revenue. Already, in Venezuela, the government and the people have seen that tensions brought on by the drop in oil revenues has made an uneasy political situation more tense. The government and military officials are concerned that the nation might be dealing with a revolution if the revenues and the provisions for basic necessities are not restored. This potential unrest goes beyond a mere desire for more revenue. It is perhaps more accurate to call it a crisis. Immediately after the meeting of OPEC, the president of Venezuela, Nicolas Maduro has ordered the slashing of the budget for the population. This comes amid an already austere economy.
In Russia, exasperation also seems to be the most accurate description of the oil market situation. The plunge in crude prices has been particularly hard on the Russian economy. Fully half of Russia’s governmental operating revenue comes from oil. The high lifting costs of the Siberian oil makes Russia one of the first countries to acutely feel the pain of lower prices. These were the same conditions that had played such a huge role in the dissolution of the Soviet Union. As the prices fell below a certain point, the actual profit level of the nation’s oil production fell below the zero margins. The government was effectively out of business. In a nation where the government survives or fails depending on its oil revenue, the current situation is one of desperation.
If the current prices are depressed for an extended period of time, the funding of a variety of Russian projects is likely to completely dry up. In the earlier crisis that had occurred during the Reagan era, this crisis level on pricing was roughly 80% of the former stabilized price, On a par with $100 barrel oil, this would equate to $80 a barrel as the new “shock level”.
Premier Putin has recently quoted by Russian news agency RIA Novato “If world oil prices stay at $80, all production will be ruined. No major market participant is interested in this. “The ruble is taking a major hit. The Russian currency has already suffered a major blow. The lessening value of the ruble has experienced a 25% decline in the past four months relative to the dollar as the nation suffers a double whammy from both the imposed sanctions and the falling oil prices.
Shawn Bartholomae goes on to state “Much of the world seems restless amid the stresses that uncertain oil situation are bringing. The senior partner of Silver Tusk Oil co. further states that it is a time to be vigilant and to keep aware of the changing situation. “
Mr. Bartholomae also notes “One cure for low oil prices is low oil prices themselves. “
It is this self-regulating aspect of the market that keeps the long-term investors in the market and assures the world that the conditions of the free market will eventually win out. It is the competitive elements of this free market that may prove to be the greatest contribution of the shale producers to world oil.
Oil output for the United States has been booming thanks to hydraulic fracturing, which involves blasting a high-pressure blend of water, sand and chemicals deep underground in order to release hydrocarbons trapped between layers of shale rock.
It is the success of this type of production that is drawing much attention to the Texas and the American oil industry. The big question emerging in the 2015 markets is related to the staying power of the various oil producers around the world. Analysts seem to be in agreement that the basic question of oil coming back is a matter of when it occurs and not if it does occur. Shawn Bartholomae, senior partner of Silver Tusk Oil Co. states that that the company will keep a keen awareness of the factors that will shape the market in this pivotal year. This shale production boom has been the center of the attention focused on the production surges in the United States.

Source: Shawn Bartholomae
Silver Tusk Oil
Dallas, Texas.

Shawn Bartholomae, senior partner of Silver Tusk Oil Co., comments on latest trend in oil and gas

Shawn Bartholomae comments on latest trend in oil and gas

Shawn Bartholomae comments on latest trend in oil and gas

When the OPEC members met in Vienna, on Thanksgiving Day, 2014, Shawn Bartholomae noticed there were few analysts who had expected the leading members to cut production in an effort to raise the price of oil. What many of the observers of the meeting had predicted about the main objectives and who was the central target of OPEC was confirmed.

The leader of the meeting was Saudi Arabian oil minister Ali al-Naimi. Headlines in many papers, such as Reuters were screaming “OPEC declares war on shale producers. The actions taking place at the meetings and the language used by the participants confirmed beyond a doubt that it was the shale producers that the OPEC members had squarely in their sights.

The senior partner of Silver Tusk Oil Co., Shawn Bartholomae states “It is a time for all operators and producers of petroleum to steady the ship. We will keep an eye on all developments and study the impact of each new set of conditions.”

The OPEC meeting has been described as a “wake up call”. While the war on shale seems to have added some focus to the intentions of OPEC, the concept of a wake up call can go both ways. The oil minister of Saudi Arabia, the chairman of the group at the meeting, Ali al-Naimi has specified intentions of re-establishing OPEC as a world leader of the international oil markets. He has expressed his intention to prove that he is able to unify a coalition that was becoming increasingly unruly, this is a critical junction in world history as it has been the cooperation of the members of OPEC that has proven to carry so much clout in the world’s oil markets.

The spokesman for OPEC has expressed his determination to avoid ill-advised price manipulations, and he has pledged to restore OPEC’s credibility in the markets.

It is the changed conditions and the new realities of a complex oil market that the kingdom might have to face up to. It has been noted that if the other 11 members of OPEC do not act in any cohesion and cooperation and adopt the guidelines as set forth by the Saudis , then the credibility of the cartel will have been exhausted. In the past meetings, Saudi Arabia would come to the meetings, and Ali al-Naimi, acting as the head of Saudi Aramco, would call this a crisis meeting, establish and explain the results of their own market studies and analysis , then they would announce the amount of oil that needed to be cut .These new numbers were thus called their “quotas”

Mr. Shawn Bartholomae noticed that after all of the dust had settled, it was the kingdom that had endured the lion’s share of the cuts and they basically had achieved little for themselves but had cut their own production. The Saudis had seen their own productivity cut from 10.5 million barrels per day in 1981 to as little as 2.2 million barrels per day by the end of the year 1985. While willing to make a commitment to curtail production and thus maintain a higher price, the Saudis are understandably growing more reluctant to bear the burden of any future cuts largely by themselves.

In this latest gambit , their intentions emerged on a policy of keeping prices low or even stepping up production somewhat …to manipulate the prices even lower….if the prospects for forcing some of the shale producers out of business did in fact exist. They are eyeing the higher lifting costs of the shale producers as a target. This calculation is the basis for their gamble.

The factors that could serve to throw these calculation out of kilter are many fold. One huge factor that might have made earlier calculations suspect is that North American crude is not as expensive to produce as it used to be. The technologies are improving consistently to make this lifting cost even lower.
Lux Research analyst Daniel Choi has stated:

“Tech startups in energy exploration have raised $7 billion in the past decade, generating now-tiny companies that will use advances in seismic data collection and steam-assisted gravity drainage to lower costs even further.”

While the severity of the dip and the staying power of the affected nations to live with the lower prices is yet to be determined, the shale industry has reason for some optimism.

As Shawn Bartholomae, the senior partner of Silver Tusk Oil Co. has stated “The oil and gas industry, and in particular, the shale industry has already proven it can adapt to new production demands. The petroleum industry has shown a keen sense of innovation. Now the industry may be called upon to prove its toughness”

The industry is bracing for a shakeout. As one might reason, the first casualties of this shakeout could be any weakly financed companies that are operating close to the break even point. The remaining companies who weather the storm might find the plunging prices to be a blessing in disguise. If the new economic environment causes the industry to adapt cost saving measures to operate more efficiently in order to continue profit margins, then this market could make the companies stronger when the prices return.

Mr. Shawn Bartholomae affirms that it is the technological innovations that are shaking up the old structures of the oil markets. These innovations had gotten their start in the Texas fields. The surges of technology and innovations have forged the revolution.

From the Middle-Eastern point of view, one of the most threatening aspects to the kingdom has been the advent of hydraulic fracturing and the horizontal drilling. The production was one threat. The explosion in the growth of the fracturing technology was another. These two technologies, standing alone would pose a big enough threat but it is the continuing evolution of contributing technology such as highly accurate detailed 3-D seismic and MWD (monitoring while drilling), computer coordinated techniques that is transforming the oil and gas exploration world.

Some analysts however are beginning to question the wisdom of the recent moves by Saudi Arabia and their ability to coerce cooperation among its members to use their collective willpower and make them adhere to any lower price ambitions. Just because a rooster crows doesn’t mean he has caused the sun to rise.

The Saudis do appear to be able to get oil out of the ground for a very low lifting cost, in the neighborhood of a mere $2.00 or $3.00 a barrel, but their need for money doesn’t stop at the well head. Their social programs have grown alongside of their oil income. The swollen appetite of these programs has kept them bound to a higher price for their oil. It will not be easy for the ruling members of the kingdom to tell their citizens to simply eat less or reduce the size of their homes, or lower the utility costs in order to accommodate a more stringent national budget.

It is this natural tendency for a socialist form of government and a people to make room for and find a spot for all of the revenues that their oil and gas has produced. This is the bottom line for a national budget which is heavily oil dependent, not some fictitious projected lifting costs. These social demands have quickly created a floor on the amount of money that they need to comfortably survive with unlike America, with a diversified economy with many sources of revenue, their capital source is one way. They remain hooked on their oil fortunes.

The real pain threshold point according to some analysts is much higher than the stated lifting costs. Better education and health care consumes a big chunk of the budget. All governmental employees routinely get a 15% pay raise. The population gets improved unemployment benefits. The government has stood behind and financially supported a subsidized minimum wage hike. Some members of the population were treated to new homes. In one year alone, 2010, this number of new housing constructions was 500,000.

The actual lower level or pain threshold concerning the price of oil in the kingdom could be closer to $100 a barrel.

Shawn Bartholomae speaking as the senior partner of Silver Tusk Oil Co. Goes on to say “There are many elements in the current mix of factors that are working to determine the evolving energy prices. We will approach matters with caution and keep a keen eye on the market and develop our policies accordingly.”

It could be that many analysts are looking in the wrong direction to understand the current oil prices. It is possible that OPEC. While still important to the oil picture, has lost much of their relevance. It is this fight to regain their global position that is at the core of the struggle for oil dominance. It may also be possible that the current situation in the oil and gas markets is a buyer’s market. There could be as many opportunities in the current situation as there are dangers.