By Steve Stengell – President CEO, Encore Energy, Inc.
Bowling Green, KY (01/08/16): It could be 90 days, 6 months or even a year or more, but crude oil is positioned for a sustained triple-digit recovery in the not-so-distant future. Blinded by all the false propaganda, the world oil markets are paying no attention to critical data regarding the overall health of global production, including the lack of drilling and pressure-depletion of our producing fields.
Today’s temporary “oil glut” could provide a tremendous opportunity for investors!
Here are five (5) critical reasons why:
- The U.S. rig count is down 65% while international rigs are off 15% from last year. There is very little new production coming online to off-set the ~3 – 6% annual decline in global oil production. How are we maintaining the current production levels?
- Our current inventories only represent a small percentage of short-term supply and are NOT a good indicator for long-term supply or price.
- Production is declining much faster than analysts realize, and the producing fields across the globe are being pushed too hard to “pay the bills” (i.e. pressure-depletion).
- Today’s deeper and more complex “non-conventional” well design demands more money and the ramp-up periods for drilling and production are measured in years, not months. Oil finding costs are ever-increasing because the oil reservoir rocks are growing both “deeper” and “tighter”. The low-hanging fruit is nearly gone!
- Bank-financing for new projects have dried up due to a combination of lower prices and the severely understated production decline from US shale projects.
Saudi OPEC has won the war against US shale producers and regained their market share with future plans to restrict production when collective “pullback” is reached between all producing members a. US shale producers, Saudi OPEC and other world producers are pushing their fields too hard in order to meet expectations, which adversely affects and is absolutely devastating to future production and reserve volumes.
Bottom line, the longer oil stays undervalued, the steeper the slope of this return! There are no substitutes for the black stuff and the long-term price outlook could not be stronger based on supply, demand and increased finding costs.
Encore Energy remains focused on its low-cost “conventional” oil drilling programs while preparing an exit strategy for when oil prices return. The Company is developing a 30-well program off-set to its most recent discovery well that reported 270 BOPD IP (24-hour rate). Encore’s well strategy provides much higher ownership and diversification to each partner as compared to today’s nonconventional projects.
If you are a qualified Accredited Investor (SEC defined) and would like to learn more about how to prepare for Oil’s return to $100 per barrel while benefiting from a 100% IDC tax deduction, please contact Joseph Hooper at (270) 842-1242, ext. 224 or via e-mail at joseph.hooper@encore-energy.com