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No Longer Dependent On OPEC?

Results Of 1973 OPEC Oil Embargo

Introduction…The 1973-1974 OPEC Oil Embargo on the United States caused the price of oil to nearly double, high inflation, high unemployment, and shortage of gasoline resulting in long lines at the service station.  The pledge of nearly every U.S. President since President Richard Nixon has been U.S. energy independence.

Click here to watch the video that demonstrates this shift in economic dependence.

Let’s briefly review a few of the oilandgasinsider.com articles that demonstrates this shift in economic dependence.

  1. Texas Oil & Gas Production in Expansion Cycle
  2. Why Billions Are Pouring Into U.S. Shale
  3. Private equity funds raised $19.8 Billion for US oil ventures first quarter
  4. Even though price is still around $50 per barrel because producers have slashed up to ½ the cost of pumping oil from 2 years ago, making new production profitable
  5. OPEC On The Brink of Collapse
  6. Russia Cutting Production as U.S. Shale Escalates
  7. Dumping Billions in Canadian Assets For Permian Basin
  8. Marathon acquired 70,000 acres in Permian and 51,500 acres for $1.1 Billion
  9. Why Major Oil Company Goes Big On US Shale- ExxonMobile –major oil companies all but abandoned new US production several decades ago.
  10. Texas Fifth Straight Double Digit Jump in oil rig count on February 7, 2017
  11. Nearly $1 Trillion Worth Of Oil Found In Texas, Largest Deposit Ever Discovered In US.
  12. Permian Basin producing oil and gas since 1920 so infrastructure is well developed reducing production costs. And some are still claiming the largest deposit ever discovered in the US

Conclusion…The United States did oust Saudi Arabia as the world’s largest oil producer May 2016.  However, Saudi Arabia regained that title four months later. But, just as important, the United States holds 264 billion barrels of oil of which one-half is in shale.  This total exceeds both Russia and Saudi Arabia.

To conclude the U.S. is “No Longer Dependent on OPEC” may be true finally after 45 years of Presidents pledging to make the United States energy independent.  This is Bill Moist, MS, CPA

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Three Keys To Successful CSWD Facility

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CSWD Facility

Introduction...Last week we discussed here The Surprising Discovery Of One Oil Executive.    This week we want to continue that discussion by getting into the Three Keys To Successful Commercial Salt Water Disposal (CSWD) Facility.  The ATM of the oil patch as described by insiders.

  • Location – The proximity of the CSWD to producing fields is critical, as the cost of transporting produced water to a disposal facility is one of the larger recurring expenses that an operator incurs. Our next facility is located approximately three miles from one of the larger producing fields in area. This producer disposes of approximately 325,000  barrels of water per month in the county. A larger portion of this producer’s water is produced in close proximity to our next facility, as way of illustration.  This producer wiill commit a large portion of their produced water to us.
  • Water Commitment – The commitment of water directly from the operator / producer is important to the our next facility. This allows the management to contract the water either directly with our preferred trucking company. Our preferred trucking company will base a number of their trucks at the facility and haul all water they have access to within a 20-mile radius.
  • Commitment to the Customer – The management of our next facility also operates producing properties.  The management understands  the other issues that concern an operator as it relates to choosing their disposal partner.  These Issues such include safety, ease and speed of off-loading.  Accurate and readily available reporting is important to the trucking company.  The facility will aslo provide driver amenities such as clean restrooms, cold water, and snacks.

Conclusion: The steady cash flow that is not dependent on oil pricing or new discovery makes prime CSWD properties a valuable asset.  That is one reason these ATM’s of the oil patch rarely come up for sale.  However, we have found a seller that has good facilities that can be acquired.  Drop me an email if you desire additonal information on this discovery.

This has been Bill Moist, MS, CPA reporting today Three Keys To Susccessful CSWD facility.

The Stock Market Is Too Risky For Me & Maybe You Also

AlibabaIPOAt one time I was a stock broker and a principal of a NASD broker dealer. During that time I learned many things that convinced me that Wall Street is for gamblers.

Every year I had to take continuing education classes.  Each year there was a new investment theory that was be promoted by many stock brokers, financial planners, and insurance salespeople.  When I asked why we had a new investment theory, I was shocked by the answer.  Last year’s theory did not work out as expected.

The next year I discovered that the investment theory was being promoted by the wholesalers promoting product.  Since everyone wanted some new idea to sell, the advisors went along.

Last week the Shanghai Stock Exchange plunged another 5% after dropping 30% since November.  The Dow Jones Industrial Average dropped 1,000 points at the lowest trading.  What does the Chinese problem have to do with the U.S.?  We’re supposed to have a strong economy.  China buys very few products from us.

The problem is that many of the emerging market index funds have to buy those shares.  When there is a drop in value, those index funds have to sell off to met redemptions.  In tern dragging the U.S. markets down.

Many of those funds invested in Alibaba Group which reportedly controls 80% of China’s online shopping.  Sounds interesting.  Problem is you don’t actually own Alibaba shares which is prohibited by Chinese law.  Basically, the Alibaba stock will own a stake in a Cayman Islands-registered entity which is under contract to receive a profit from Alibaba’ lucrative Chinese assets but will not actually own them.

Does this sound risky to you?  Would you bet your family’s financial future on such a scheme?   Does investing in a Cayman Islands-registed entity sould safe?

Stay tuned as we discuss more U.S. based assets that grows revenue  in up and down markets.

First Tanker Of U.S. Crude Leaves Corpus Christi

Oil Tanker Leaves Port Corpus Christi Foreign-bound oil is first since 40-year ban recently lifted.

ConocoPhilips Co. and NuStar Energy, LP loaded the tanker pumped from the Eagle Ford Shale of South Texas.  Vitol Group, Dutch oil-trading company, is buying the oil according to NuStar.

The legislation lifting the 40-year ban was signed two weeks ago.

Whether lifting the ban will help or hurt oil pricing is to be seen. But, from a foreign policy point of view it seems that the United States should help its friends when they have a shortage of oil due to unforeseen tragedies.  After all, when Hurricane Katrina hit the gulf coast and curtained oil production, the United States had to rely on foreign oil imports.

OPEC has used crude oil as a tool to hurt the United States during the 1973 Opec Oil Embargo.  Why shouldn’t we use it as a tool to help those countries who support democracy and free enterprise?

There was one unanticipated country who apposed lifting of the crude oil export ban…that was Canada.  They were counting on the Keystone Pipeline through the United States to create new markets for its crude oil from its oil sands. Well there is always someone unhappy with any political  decision.