The Million-Barrel Daily Jackpot

Forward to a Friend Having trouble viewing this issue? Click here. Refer a Friend to Energy and Capital.

The Million-Barrel Daily Jackpot By Keith Kohl | Tuesday, December 3rd, 2013 Forget OPEC. I realize these may not be the words people expect to hear when discussing the global oil complex... But if things continue as they are right now, the 12-member oil cartel might as well pack its bags. Even setting aside the shady reserve increases in the past, the group apparently has a bigger issue to solve. Geopolitics is dragging down production. Last month, estimates pegged OPEC's crude output at ~29.4 million barrels per day, or roughly 600,000 barrels per day less than the quota they set. That's the lowest production rate for OPEC in more than two years. The problems are easy enough for us to pinpoint, with production slumps occurring in the geopolitical hotspots of Iraq, Libya, and Nigeria. The Saudis have always just swooped in to boost field production to make up for the supply loss (we won't mention the issues over quality that come to mind). But how many times will this occur before they reach a breaking point? Or have they already? A few months ago, a multi-decade record of more than 10 million barrels per day was flowing from Saudi wells. But the party didn't last long, with production tumbling nearly 4% since. And compounding the Saudis' frustration is the million-barrel daily jackpot we struck in the Midwest — one that has led to the only sure bet in today's crude markets... Advertisement America's New Oil Zone: 4x Bigger than the Bakken, 4x Bigger than Texas Competition is quietly boiling among oil companies to buy drilling real estate in what is the biggest oil find on American soil... This new oil formation is so rich and so huge, it holds a mind-blowing 400 billion barrels of crude, according to the U.S. Energy Administration. Get the full investment details here. The Million-Barrel Daily Jackpot As you know, the Williston Basin is home to the Bakken Formation, which has practically become a household name since the USGS reassessed the resources in this region back in 2008. While production from wells drilled into the Bakken steadily march toward the one-million-barrels-per-day threshold, the truth is production from the entire basin has already surpassed that mark. We must take into account the 931,000 barrels flowing out of North Dakota each day, and add these to the production from other areas of the Williston Basin (in eastern Montana and South Dakota, which total more than 75,000 and 5,000 barrels per day, respectively). And there's another reason to go after the oil-rich shale formations spread across the lower 48 states... Our new supply comes with an added bonus compared to the heavy oil that makes up Saudi Arabia's existing spare capacity. Truth is, we've got both quality and quantity at our fingertips. This attractive U.S. crude supply opens the door for the only sure bet in oil in 2014. Advertisement Do you know what this image below is...? It's a new technology sweeping across counties in Texas, and the Williston Basin and could soon be deployed in the San Joaquin Valley in California. It will revolutionize energy profits like nothing else can and make some lucky investors wealthy. You can go here for full details.  The Only Sure Bet in North American Oil Profits How many times over the last few years have we given away the only win-win game in the oil markets? I know, it sounds almost too good to be true. But I'll show you why the best is yet to come... Right now, there's only one major obstacle for these Midwest producers, and it isn't pumping oil out of the ground. No, the struggle for companies in the Bakken is getting this supply to market. Think about it: More than six of every ten barrels produced in the Williston Basin are shipped via rail. For the record, that share actually increased by about 5% since last year. More importantly, this trend will continue as oil production in the area continues to jump. Believe me, it wasn't a coincidence that Warren Buffett was willing to part with $26.5 billion for Burlington Northern Santa Fe three years ago. But his isn't the only horse in the race, and over the past year, Canadian Pacific has helped transport the roughly 600,000 barrels of oil that head out of the Bakken by rail. How did Canadian Pacific fare against Big Oil? (Note: ExxonMobil's $41 billion shale deal for XTO Energy dwarfed Buffett's $26.5 billion rail bet.) I'll let you decide... So far this year, it hasn't even been close. Pipeline constraints will only grow tighter as we move past the million-barrel-per-day benchmark, making these “pipelines on wheels” more critical than ever for companies willing to pay a premium to reach refiners. Until next time, Keith Kohl @KeithKohl1 on Twitter A true insider in the energy markets, Keith is one of few financial reporters to have visited the Alberta oil sands. His research has helped thousands of investors capitalize from the rapidly changing face of energy. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital as well as Investment Director of Angel Publishing's Energy Investor. For years, Keith has been providing in-depth coverage of the Bakken, the Haynesville Shale, and the Marcellus natural gas formations — all ahead of the mainstream media. For more on Keith, go to his editor's page.   I liked this article | I did not like this article Follow Energy and Capital on The Bottom Line Related Articles Permian Basin Oil Production Revving Up for an Oil War Reviving Mexico's Oil Industry How Exxon is Losing Billions on Oil Recently... Dirty Robots! Drill, Baby, Drill... eh? One More Reason to Fear China The 51st State's Energy Crisis Dr. Robot (No, Really...)

This email was sent to ignoble.experiment@arconati.us . You can manage your subscription and get our privacy policy here. Energy and Capital, Copyright © 2013, Angel Publishing LLC, 111 Market Place #720, Baltimore, MD 21202. All rights reserved. No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned. While we believe the sources of information to be reliable, we in no way represent or guarantee the accuracy of the statements made herein. Energy and Capital does not provide individual investment counseling, act as an investment advisor, or individually advocate the purchase or sale of any security or investment. Neither the publisher nor the editors are registered investment advisors. Subscribers should not view this publication as offering personalized legal or investment counseling. Investments recommended in this publication should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company in question. Unauthorized reproduction of this newsletter or its contents by Xerography, facsimile, or any other means is illegal and punishable by law. Please note: It is not our intention to send email to anyone who doesn't want it. If you're not sure why you're getting this e-letter, or no longer wish to receive it, get more info here, including our privacy policy and information on how to manage your subscription.