Small Investor finds A Clever Way to Hedge with Oil
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ARTICLE: Hedging the Eurodollar with oil. "A clever strategy for the small investor!" Everyone knows the price of oil is market driven worldwide, however, few realize the cost and economics of finding and producing oil is geographically and geopolitically driven. For example, it is possible to drill new oil wells in old oilfields in the United States at amazingly low cost taking advantage of the devalued US dollar. Typically, these are small shallow wells, usually less than 10 bbls per day, in fields developed long ago and long abandoned by big oil during times of depressed oil prices or after reaching a certain stage of depletion. The US DOE, has stated, "Premature abandonment of marginal oil wells and fields is a growing energy problem in the United States." Some experts believe the equivalent of 10 years of middle east oil production remains in the undrilled, left behind, or plain missed, shallow locations in previously leased properties that were later abandoned during times of depressed oil prices. That remaining oil can be drilled one well at a time, selecting "left behind" locations, as they are located, and is perfect for small investors. At $90 per barrell, these small wells produce very attractive cash flows for the small company or individual. Best of all, small wells drilled in old fields are of little or no interest to the trillion dollar oil companies that were there before you. It's simply not attractive for a large company to pick up a few missed drillsites in an otherwise abandoned field when economics of scale demand they move at division level scale. This means little or no competiton. Today in the US, crude purchasers and refinery's are clamoring for crude oil and most operate fleets of tanker trucks that at a moments notice, will cruise into an old oilfield and purchase by the tanker load provided the operator has a clear title. They will even handle the accounting and distribution of the proceeds for the oil well's recorded owner and royalty holders.
It's possible to own your own small oilwell in the US no matter where in the world you live! Let the refinery mail you your monthly check! |
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