The energy market is providing a huge opportunity to make early profits for clever investors. The energy industry’s unique place in the global economy creates an endless stream of bull markets and big trends. And the five trends I’m going to share with my valued clients and readers are a continuation of these ongoing stream of energy-related bull markets. You probably know the industry has seen a long string of major opportunities over the past decade or so. Right now, the energy industry is betting its future on five big trends. I’m talking about as much as a $100 to $120 billion per annum increase in direct spending on just one of these five trends. If you can consistently get in front of these big trends then you can produce staggering financial gains.
No, I’m not talking about shale gas or crude oil (though I have some new insights at the end of this presenta- tion for you on that sector), I’m talking about trends that most investors have never heard of but that represents the future of the oil & gas industry. If you can get in front of this tsunami of money making opportunities from the energy industry then you can be very successful as an investor in the energy sector. Because it’s a basic rule of life in the energy sector that stock price gains FOLLOW direct investment by the industry. These 5 Giant Game-Changing Energy Trends will set the pace going forward.
—-KILLER INVESTMENT STRATEGIES FOR SHARP AND SAVVY INVESTORS
1. Super Boom in Sub sea Infrastruc- ture. The Oil & Gas industry is increasing investment to FIVE TIMES the amount from $27 billion a year to $130 billion a year on these new unseen infrastructure.
2. Super Boom in Oil Production technology that is TRIPLING the value of existing wells: It’s an investor’s dream-come-true because it is the equivalent of re-discovering every known oil-field TWICE OVER. Super Boom in Hyper Oil & Gas Hunting. New technology can discover new oil & gas fields FIFTEEN TIMES FASTER than earlier methods. This tech is sweep- ing through the industry like wild-fire as explorers race to find new fields first… but the tech is where investors will make the biggest returns and the fastest.
Super boom of $200 Billion in Specialized Engineering Firms: A pipeline of $10 billion plus projects easily totaling over $200 billion will likely make these engineering firms – and their investors – rich .
5. Super Multi-Billion Boom Shale Revolution Goes Global. Shale market profit will last for the next 3 years for smart investors who make an early investment.
And energy trends are kind to THE INVESTORS.
Sources: Oil and Gas Journal, WSJ, FT.com, Energy market report and S&P 500 website.
To put that in perspective consider the S&P 500 during that same period delivered a cumulative 7-year return of just 14.24% – or only enough to grow a $10,000 investment into $11,424.And that’s if you totally missed the biggest energy trend of the last decade – the shale boom that delivered spectacular gains like…
3,241.66% gains in Gulfport Energy Corp. – enough to turn $20k invested into $668,332 – in about four years…
3,727.08% in Southwestern Energy Corp – enough to turn every $20k invested into $765,400…
This stream of big stock gains in the energy sector is seemingly endless. Even large cap companies like Halliburton have their stock shot up 441% when it climbs on the back of a single energy trend. I am going to share these five trends investors should be paying the most attention because so much industry money is piling into them…
One thing to keep in mind when investing in energy trends is this: Trends move through the energy industry in a logical sequence. As an investor if you DON’T understand this logical sequence – the time lines of projects, how money moves through the supply chain, the various regulatory processes etc. – then you’ll probably miss even the most obvious trend. You’ll invest too early and have to wait for years and years to make money OR you’ll invest too late and miss out on the biggest gains entirely. For example, oil & gas has to be discovered before it can be recovered. Then it has to be trans- ported, refined, and sold. There’s a logical sequence on the business side of energy. And that is just as true for investors.
The trends I’m about to share with valued investors represents the best current opportunities for the inves- tors. There are many other booms and trends that are taking shape, trends considered “cutting edge” in the industry. These five trends are where the industry is putting its money right now AND where investors have the biggest opportunity.
BOOM #1: THE $103 BIL- LION ANNUAL INCREASE IN SPENDING ON SUBSEA PROCESSING SYSTEMS
Right now only about 30% of oil and gas extracted in the world is from off-shore oil & gas production.
Most of the off-shore production facilities are from shallow water wells. Only 9% of that oil and gas is being recovered from deep water wells. And that is changing fast. One of the biggest trends in the oil & gas industry is best described as: “Deeper, deeper, deeper.”Over the next 15 to 20 years the industry expects off-shore oil and gas production will be equal on-shore production. Think about that: this is like getting into the traditional oil industry back before all of the biggest fields were put into production! Most on-shore fields are mature fields. But the ocean holds enormous oil & gas fields like the Shenandoah Basin in the Gulf of Mexico that looks like it could hold 15 BILLION barrels of oil or the Mad Dog Field holding an estimated 4 billion barrels. That’s why the oil & gas industry is betting its future on deep water drilling.
Sources: Oil and Gas Journal, EIA.
And it’s barely been tapped. The industry currently spends $27 BILLION a year on sub sea facilities – for wells at depths of up to 7,000 feet or more. That number is set to grow almost FIVE TIMES over to $130 BILLION in 2020. Right now is the time for smart investors to get in front of this $100 billion a year ramp up in spending on sub sea facilities.
Deep sea wells are drilled by a movable rig and the extracted oil and natural gas is transported by riser or undersea pipeline to a nearby production platform. Sub sea systems, used at depths of 7,000 feet or more, don’t drill; they extract and transport the oil or gas. Unlike traditional shallow water drilling, sub sea systems actually process oil & gas on the sea floor. These systems can separate unwanted elements from the oil & gas right on the sea floor: remove or re-inject water into wells, boost well fluids, remove sand and sediment, separate gas & liquid. These are all activities that USED to happen above water which made deep-sea processing so expensive. Basically sub sea systems cut out an entire layer of traditional production simply by doing everything down on the sea floor. That translates into lower production costs so it saves money and increases the profit margin on each well. PLUS; sub sea production also allows you to use a single platform to service multiple wells. In other words, it saves money while increasing production – a double winner for the industry.
BOOM #2: THE LAZARUS PROCESS: TRIPLES THE AMOUNT OF RECOVER- ABLE OIL IN EXISTING WELLS.
Like Lazarus rising from the dead this technology revives “dead” oil wells. And TRIPLES the amount of recover- able oil from existing wells. For decades the industry has poured money into research and develop- ment on how to get more oil out of existing wells. Up until now each new oil well had two phases of production: Phase one is when hydrocarbons rise to the surface themselves – this is the iconic image of oil gushing up out of a well. When the natural pressure stops traditional pumping is used.
Phase two starts once that primary source of oil is exhausted – water or gas is then injected into the wells to increase the pressure and drive the oil to the surface. The Lazarus Process allows drillers to recover 75% of the oil in a well instead of a paltry 25%, effectively TRIPLING the oil recovered from each well.
This is not theoretical. It’s a proven, commercially viable process that is already being used. Think about that: The Lazarus Process takes a “dead well” that produced 1 million barrels and goes back and pulls 2 million more barrels out of the ground. Right now in the U.S. alone there are about 89 BILLION barrels of oil sitting there waiting to be extracted from “dead wells.”
Best of all: The process works by REDUCING carbon pollution! It’s based on recovering CO2 pollution produced by the oil refining process and pumping that gas into the wells. That makes it a strong platform for politicians who want it to spread throughout the industry. And makes it a financial slam dunk for drillers. I believe it will be a slam dunk for investors too for obvious reasons.
This is a big trend just barely getting started from an investor’s standpoint. It’s called Enhanced Oil Recovery. This technology is a MAJOR NEW PROFIT CENTER for the oil industry. There is another breakthrough whose time has come from an investor’s standpoint. It finds the same amount of oil in a matter of weeks that it took a decade to find back in the 1990s. You may not know it but the energy industry is second only to the U.S. Department of Defense in the use of super- computers.
They are used in seismic imaging to make it easier to find oil & gas fields before drilling.
It replaced the old method of drilling, drilling and drilling to find the promising spots for oil and gas wells. Essentially what these supercomput- ing systems do is analyze vast amounts of seismic imaging data collected by geologists using sound waves.
What it means for the industry: Whoever has the best super- computers gets to the best oil & gas fields FIRST. So it saves money while finding fields faster. Explorers in the industry who use their system will be able to find oil and gas fields FIFTEEN TIMES FASTER than their competitors. Clients are flocking to them.
BOOM #4: GAS INDUSTRY ON TRACK TO INVEST $200 BILLION INTO THESE PROJECTS
In June 2013 the U.S. government approved a $10 billion Freeport Liquid Natural Gas (LNG) Develop- ment Project. These LNG terminals are a necessary new infrastructure for one of the biggest bets the gas industry is making right now.
You see, natural gas faces a massive problem. It’s not easily stored in gaseous form.
It functions more like electricity than it does oil. You need to have a direct connection between the source of the natural gas and the end user. Just like you have power lines bringing electricity into your house. That severely limits demand for natural gas because building a pipeline infrastructure similar to the electrical grids is too impractical. Liquefaction, the process of turning natural gas into a liquid that can be stored, is the solution. The good news is: The U.S. government, major oil companies like Shell Oil and others, and the gas industry as a whole is aggressively pushing to build NEW LNG INFRA- STRUCTURE.
The $10 billion Freeport Liquid Natural Gas (LNG) Development Project is just the tip of the iceberg of projects in the works. We could see 5 more of these $10-$12 billion projects starting this year alone.
And see 19-20 more right on their heels.That could be $200 billion or more in investment into this new infrastructure. So ask yourself: Who is going to benefit FIRST from the rise of LNG infrastructure? Long term the Liquid natural gas exporters will benefit. The LNG terminals being built are essentially highly specialized ports to manage the logistical issues around the transportation of liquid natural gas.
BOOM #5: THE SHALE REVOLUTION GOES GLOBAL – WHO’S NEXT IN LINE?
North America has been the leader in the shale revolution. It’s completely transforming the oil & gas industry in the United States and Canada. But the trend will NOT stop in North America.
We are sitting at the beginning of a global trend to tap shale oil and gas. New fields are being discovered almost constantly.
And the proven reserves that we know are technically recoverable with the current technologies are impressive.
Russia has 75 billion barrels of recoverable shale oil and 245 trillion cubic feet of recoverable shale gas.
China has 32 billion barrels of recoverable shale oil and 1,115 trillion cubic feet of recoverable shale gas.
Argentina has 27 billion barrels of recoverable shale oil and 802 trillion cubic feet of recoverable shale gas.
Brazil, Mexico, Australia, South Africa, New Zealand, Indonesia, Algeria, Libya, India, the United Kingdom and other countries all have huge fields of shale oil or gas.
Globally we’re looking at 345 billion barrels of technically recoverable shale oil and 7.2 quadrillion cubic feet of recoverable shale gas. This is a massive trend. But it is not a trend you want to dive into blindly.
Not all of these resources will be unlocked this year, or next year, or even the year after that. Again, we have to look at the necessary sequence of events that need to happen on a country by country basis, company by company basis. If you want to get on board the global shale revolution you need to be keenly aware of both what the oil & gas industry is doing in each of those countries. You need to know how long the government approval process to unlock those fields is in respective countries – and exactly where the process of each company is at any given time. You need to understand the regulatory hoops that new projects have to jump through… and how the specific companies involved are equipped to handle them. Wishing Happy Investment in these trends in the energy market to all readers.