The Greatest Investment Theme of This Decade
By: DailyWealth
Matt Badiali writes: It’s not too late to grab a stake in the U.S. oil boom…
Yesterday, I shared my experience at the U.S. EIA 2014 Energy Conference last month in Washington D.C. In short, some of the smartest people in the industry, like Daniel Yergin, are projecting U.S. oil production could nearly double from today’s levels within the next 20 years.
And that projection may end up being conservative…
As you know, new technology has unlocked vast supplies of oil in the U.S. And these technologies are still in their infancy. The oil industry is 150 years old and we’ve been fracking for gas for years… but cracking shale for oil is just five years old.
In conventional oil fields, oil production declines about 5% per year, and we recover about 50% of the oil in place. In shale (or “tight”) oil fields, production declines 50% per year, and we recover about 5%.
In other words, we’re leaving 95% of tight oil in the ground.
There are trillions of barrels of oil in U.S. shale. And as we improve our extraction methods, production estimates will continue to climb.
Our supply will soon overwhelm our existing infrastructure. And we’ll need new pipelines, new ports, new refineries, and new laws to accommodate the growth.
Companies are going to spend tens of billions of dollars developing U.S. oil assets. And they are going to turn those billions into hundreds of billions, if not trillions of dollars in value.
Here are a few projects in the works…
•2,000 new hires in the Marcellus Shale – an increase of about 1% of the total workforce.
•Global Partners (GLP) plans to build an oil-rail terminal in Port Arthur, Texas.
•ONEOK (OKE) plans to invest $785 million in gas processing in the Bakken Shale.
•Summit Midstream Partners (SMLP) will develop a new Bakken Shale oil pipeline and storage facilities.
•Newfield Exploration (NFX) will spend $1.7 billion in 2014 drilling wells.
• Whiting Petroleum (WLL) spent $3.8 billion to acquire rival Bakken oil producer Kodiak Oil and Gas (KOG).
Those are just the most recent headlines… but I could list hundreds of new projects planned and under construction. This isn’t a mania or a bubble. This is wealth creation at its finest.
The U.S. shale revolution is this decade’s greatest investment theme.
That’s why we believe every investor should own U.S. oil stocks. We’re already poised to produce 14 million barrels of oil per day in the next 20 years – far outstripping the major Middle Eastern producers. And as our drilling techniques continue to improve, so will our production rates.
It will take trillions of dollars in infrastructure to accommodate this growth. Huge new volumes of oil must be produced, moved, and sold. And oil companies are now in a massive investment phase. But the returns will be enormous…
For those of you who remember the oil shortages of the 1970’s, it’s a new day. U.S. oil is primed to turn the global industry on its head. We know how to find it. We know how to produce it. And the world needs it.
This trend is going to last a long, long time. It can bring you and your family all kinds of benefits. The most obvious is the incredible boost it will provide the U.S. economy. The surge of wealth coming out of the ground creates “ripple effects” across all industries. Money earned by the oil industry will flow into retail businesses, hotels, housing, airlines, and restaurants.
You can also make personal investments in the best oil producers, companies that sell services to oil companies, and oil infrastructure firms. These companies will enjoy a huge tailwind for years and years.
If you’re looking for a new career yourself, consider the oil business. If you have children thinking about careers, talk to them about the oil business. It’s going to need a lot more skilled people over the coming years. You’ll be able to find a good job for a long time.
Sure… you’ve heard a lot about the U.S. oil boom. But despite all the press it has received, it’s just getting started… and it’s going to last a long time. Don’t miss out on it.
Good investing,
Matt Badiali
http://www.marketoracle.co.uk/Article46890.html
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