Changes happening around the world have come together to create a perfect storm of opportunity for oil and gas investment. Alpha Seven Energy’s involvement in oil and gas at every level allows us to provide you with a global perspective of what’s changing now and educate you on what events are opening the doors to possibly the most lucrative investment period in recent history.
Forty years ago, we were out of gas all over the nation and were forced to ration what was there. OPEC and the Middle East were looking to choke the U.S. energy market. Fast forward to the 2013 when fracking and horizontal drilling had doubled the country’s oil and gas production. That brings us to today.
Venezuela has been a prominent oil and gas exporter for decades; however, the financial crisis unfolding there has placed them in an unenviable position. Amid talks with their debtors about restructuring the loan repayment, they are looking at new options for how to close some of the debt gap. PDVSA, Venezuela’s state-owned oil and gas company, will likely be one of the first assets to be impacted by the debt problems. Creditors could potentially seize the company’s crude oil shipments and refinery assets to keep the loans from defaulting any further.
Most of the Organization of the Petroleum Exporting Countries (OPEC) members are in support of extending the plan to cut oil and gas production. Since the beginning of this year, OPEC has been limiting the output of oil and gas production in a move to end the global supply surplus and thus increase prices. The deal to cut production is set to expire in early 2018, but several oil ministers, including Iran’s and the UAE’s, believe that the deal will be extended at the next OPEC meeting.
During his time in office, President Obama put an end to a 40-year ban on crude oil exports. This allows for the oil that can’t be refined in the U.S. to go somewhere else. Taking a look at the President Trump administration’s pursuit of ‘energy dominance’, in which vast swaths of federal acreage have been offered for oil and gas production, you can visualize another expansion of the oil and gas sector that hasn’t been available until now.
As China, India, and much of Southeast Asia move away from the highly pollutive effects of coal, there is a skyrocketing demand for cleaner burning oil and gas products. Considering the sheer volume of energy used by the world’s two most populous countries, this has significantly impacted their future oil and gas importing needs. When you include neighboring Southeast Asia, the volume required will be unprecedented. One shale giant announced Wednesday that 430,000 barrels of oil are being prepared to be sold to China, and this will be their second such sale this month.
This information all comes on the tails of the International Energy Agency’s (IEA) World Energy Outlook, in which they discuss in detail the future of U.S. shale oil and the role it will play in the global oil and gas market. The numbers presented in the report are staggering. Production in shale oil will increase from 9.2 million barrels per day to 9.9 million, beating a nearly 50-year-old record. U.S. production will account for 80% of the increase in global oil supply between now and 2025, making us the largest net exporter of oil for the first time since the 1950’s. Natural gas is looking just as promising, with the IEA expecting the U.S. to become the world’s leading exporter of the commodity. Fatih Birol, the executive director of the IEA announced, “The U.S. Secretary of State will be sitting more comfortably in his seat than the Secretary of State of today’s energy exporting countries.”
When we look at these elements together, Alpha Seven Energy sees a momentous window of opportunity for our investors. There is no better time to invest in oil and gas than now. As other players are removed from the energy equation and cut back on production, oil and gas prices will rise across the U.S. Changing production policies have opened global trade for the U.S. and made it easier for us to locate and drill, just as the world’s leading consumer bases are seeking U.S. shale oil and gas as a cleaner alternative to coal.
This window will only be open for a few years, but historically those who get in early have experienced the greatest returns. Alpha Seven Energy and our partners will not be left behind during this once in a lifetime opportunity.