We follow a strategy of acquiring producing oil wells that can be re-worked. Why? Because production from a newly completed pay zone without the initial drilling cost is the quickest way to making a great profit.
The returns and risks of this type investment vary from project to project. A successful re-completion of the well into another pay zone, largely depends on the accuracy of well logs and condition of the well and equipment. If all the information is correct and the equipment is in working order, then this investment can yield a substantial return fairly quickly. There are two reasons for this: First, you get to see how much potential oil is available before investing any cash into it; and second, someone else has already paid to drill the well which is by far the most cost intensive part of prospecting for oil. Production from a newly completed pay zone allows us to make an excellent profit without the risk or cost of drilling a new well.
Since October 2014 the US Oil Rig count has dropped 77%, as expected, the US Oil Rig count hit an all-time record low of 440 for the week ended April 2016, and is 27 units less than the previous nadir of 467, a number set on both March 26, 1999, and April 9, 1999. The US Oil Rig count has plummeted by 77% since the pre-bust peak of 1,881, set October 3, 2014.
Two years ago the price of Oil was over $100/bbl. Today (September 2017) it is hovering just under the $50 mark. This 50% drop in the price of oil has created a unique opportunity to acquire distressed assets at pennies on the dollar.
Thousands of small E&P (Exploration and Production) companies are losing money every month. With careful analysis and thorough due diligence we shall be looking to acquire assets in Texas, Oklahoma, Illinois Basin and Alberta, Canada.