Montana Oil & Gas montanaoil.com
Alberta, Canada: The Land of Opportunity
Alberta Oil Patch Part of Solution For U.S. Strategic Oil Interests
The Emerging Stock Report believes that Montana Oil and Gas could currently be positioned to take long term advantage of the surging world oil and gas market. A number of factors related to the U.S. and its need for large and secure sources of oil and gas are aligning themselves to make the Alberta oil patch a place of outstanding investor opportunities.
World Oil Prices
U.S. Strategic Interests
Alberta - A North American Part of the Solution
World Oil Prices
As of Wednesday Dec. 1, 2004
Crude oil futures (January Nymex WTI) settled at $45.49 a barrel in New York. Crude prices have been pushed up more than 50 percent this year due to strong demand and concerns about the world's tight supply cushion, inflating fears about possible output disruptions in Iraq and Russia.
The persistently high price of oil reflects the global state of supply and demand for this important resource. Prices rose again this week and some analysts are predicting it will head for $60 per barrel some time this winter. High oil prices act like a brake on the economies of oil importing countries, particularly the U.S.. Every extra dollar per barrel is like a tax on the entire country. War, political unrest, strikes and natural disasters such as hurricanes all have an effect but other factors are affecting the balance of supply and demand as well.
Production Is At Capacity
Investment in oil production infrastructure as well oil exploration is lagging behind world demand. The production from many existing fields has also peaked. A Denver-based group called the U.S. Geological Survey, that tracks oil and gas production, says that world production will peak between 2011-2015.
World oil and gas production from existing fields is declining at an average rate of 4% to 6% per year. To meet projected demand in 2015, the industry will have to add about 100 million barrels a day of new production. That's equal to about 80% of today's production level. Many of the world's largest oilfields are aging. According to the Colorado School of Mines, the world's 120 largest oilfields produce about 33 million barrels a day - almost 50% of the world's supply. The average age of these 14 largest fields is 43.5 years. From 1996 to 1999 more than $400 billion was spent on finding enough oil to replace existing oil supply sources to keep production stable at 30 million barrels. In the following three years another $150 billion was spent which grew production only another 600,000 barrels. During the decade of the 1990s, 42 billion barrels of new oil reserves were discovered while the world consumed more than 250 billion barrels.
Reserves dwindling
In 2002, the world produced slightly more than 66 million barrels of oil a day. It consumed about 76 million barrels a day, or 25-27 billion barrels a year. The problem is that only around 7 billion new barrels a year are discovered.
According to the United States Geological Survey's latest report published in 2000, the world's proven oil and gas currently stands at about 2.5 trillion barrels. A calculation using data from the Center for Global Energy Studies shows that with 28.8 billion barrels currently being consumed per year (79 million a day), there is only 80 years of supply left in the ground. Some areas have shown promise of contributing greater supplies of oil that might help the situation but they are not the complete solution. Russia has about 60 billion barrels of proven resources but that is only about enough to supply the world for less than two years. It is generally believed there are no more significant quantities of oil to be discovered inside of Russia. West Africa states accounted for only 10% of global oil production in 2000; however the U.S. Department of Energy reckons that this share will increase to a full quarter of world production by 2020. The countries involved are Nigeria, Guinea and Angola.
Demand rising
Global demand for oil is currently rising at more than 2% a year. Since 1985, energy use is up about 30% in Latin America, 40% in Africa and 50% in Asia. Energy demand is expected to rise by about 50-60% over the next 20 years to 112 million barrels a day, or 40 billion barrels a year. The existing industrialized nations consume more energy resources as their economies steadily grow but it is the new, very large demands by the rapidly growing economies of the two most populous countries in the world, China and India (each with 1 billion plus citizens) that has accelerated world demand.
China's demand for oil exceeded Japan's in 2003 and became the world's second largest consumer of oil. Its imports are increasing by 9% a year. China was previously self-sufficient in oil. This ended however in 1993. China is looking to the Persian Gulf to fill this gap. This means the U.S., the Asian economies of Japan and China, as well as Western Europe are all depending on Persian Gulf oil.
The U.S., the Asian economies of Japan and China, as well as Western Europe are all depending on Persian Gulf oil.
Are There Alternative Solutions?
Alternative energy sources are one potential solution to the problem. However it is reliably estimated that to implement these on the scale necessary to make a difference, will take at least 10 years.
Increasing production is not an option that can be implemented any time soon. For at least the past 20 years, Saudi Arabia has been able to cover any gap by increasing it's production capacity. This is simply no longer an immediate solution. Saudi Arabia is pumping at virtually 100% capacity. Much of this problem is that Saudi Arabia and other OPEC members have not invested resources in further production capacity.
All these factors are pointing towards one conclusion and that is that the era of inexpensive oil is over. The basic underpinnings of the marketplace never change. The price of oil will settle in at a new level that reflects a balance of supply and demand as it always has. It looks as if the new price level of oil may be around $50 per barrel or higher. Companies already positioned in the sector have a tremendous opportunity to prosper from the changing dynamic of oil supply and demand.
U.S. Strategic Interests
The U.S. is a long way from meeting it's own needs from domestic supplies and there are no significant U.S. opportunities in sight. Domestic oil production in the U.S. will decline from 8.5 million barrels per day in 2002 to 7 million barrels per day in 2020 - while consumption will rise from 19.5 million to 25.5 million barrels. U.S. production peaked in 1970. In order to maintain its position in the world economy and world affairs, it is essential that the U.S. have secure access to enough oil and gas to meet its energy needs. Here's the math: The U.S. consumes one-seventh of global oil production and currently imports 15-20 million barrels of oil a day or about 65% of its total needs. The U.S. will have to import more than three quarters of its total oil and gas needs by 2020. This means that the U.S. be looking more and more to an unstable part of the world to supply one of its key strategic resources. The U.S. government must necessarily look for other large reliable sources.
The U.S. will have to import more than three quarters of its total oil and gas needs by 2020.
Alberta - A North American Part of the Solution
Where Are the Proven Reserves?
What are the main sources of the world's proven reserves of oil and gas and where are they? One name that may come as a surprise to those who do not necessarily study the sector is Canada (with Alberta having the majority of Canada's petroleum resources). In the December 23, 2002 edition of Oil and Gas Journal, the trade publication gave these numbers for the world's oil known reserves (in billions of barrels).
Country Proven
Reserves
Saudi Arabia 259
Canada excluding tar sands 180
Iraq 112
Kuwait 94
Iran 90
Venezuela 78
Russia 60
U.S. 22
China 18
Norway 10
Alberta's Reserves Are Gigantic, Secure And Easily Transported
Despite the recent interest in the oil and gas sector due to crude oil price fluctuations, the significance of Alberta's oil and gas potential is still largely overlooked. Consider these facts:
These massive reserves are on the North American continent in the politically stable G7 country of Canada.
Alberta is the world's 2nd largest natural gas exporter.
Alberta's petroleum industry employs almost 215,000 people in the province.
Alberta has more than 45% of Canada's established reserves of crude oil, 100% of the country's oil sands reserves and 85% of its natural gas.
The potential yield of Alberta's tar sands (unproven reserves) is estimated at 1.7 trillion barrels of oil, more than 5 times the size of Saudi Arabia's oil reserves.
Equally important is that these massive reserves are on the North American continent in the politically stable G7 country of Canada. Alberta oil and gas can be easily and safely transported to the U.S. and other markets.
Montana Oil and Gas Well Positioned In Alberta
Montana Oil and Gas is an independent oil and gas producer with North American operations. The company's primary operating philosophy is to develop low risk, high yield, under developed oil and gas reserves utilizing the most current technology available. Montana, (MOGI.PK) started trading Mid 2004 with a team of successful oil veterans focused on oil and gas exploration in Alberta Canada, (Alberta, largest unproven petroleum reserves in the world-source US Department of Energy). With 100years+ experience, over 1000 wells drilled and a drill success ratio of over 72%, the MOGI team qualifies as a tier one team of oil men. The company's debut was well received in June with the announcement of this experienced group and their focus on this oil and gas abundant area. As prospective projects were assessed, October proved to be the month MOGI commenced drilling in Westlock, Alberta, although the company determined they had hit commercially viable production the well had gone though pressure reading tests before announcing flow rates. The company anticipates announcing its flow rates and a date to tie the well into a pay line in the near future.
November 12th Montana had announced they had successfully met the cash call for their 25% participation in the Sylvan Lake drill. The Sylvan lake development drilling program will spud within 2 weeks (The average well in the Sylvan Lake Field has produced 500 barrels of oil per day with over one million cubic feet of gas per day.) The president of Montana Oil and Gas Peter Sanders stated, "Having the chance to participate in the Sylvan Lake area is a tremendous opportunity, all the majors are there and the area has been prolific for oil and gas since the 1950's."
The average well in the Sylvan Lake Field has produced 500 barrels of oil per day with over one million cubic feet of gas per day.
Management & Advisory Board
With 100years+ experience, over 1000 wells drilled and a drill success ratio of over 72%, the MOGI team qualifies as a tier one team of oil men.
Mr. Peter Sanders - President
Mr. Peter Sanders has been involved with the public markets since 1998. His focus has been on corporate finance, offering a turn key solution for private companies looking to gain exposure from both the individual investor and institutions. Mr. Sanders is President of Montana Oil and Gas and has been involved in exploration and development of various oil and gas plays in Canada and the U.S. since 2000.
Advisory Committee
John D. Briner - Corporate and Securities Attorney
John practices securities law in Vancouver B.C., specializing in cross-border transactions. He has represented natural resource companies from both Canadian and US exchanges. John has spoken at numerous conferences around the world, and has recently presented lectures in Taipei and Helsinki on the securities and natural resources industries in Canada.
Paul Watson - Professional Petroleum Geologist
Paul brings extensive experience to Montana as he has been in exploration, development and finance of oil and gas projects over the last 30 years in North America and Internationally. Paul has participated in financings valued at $150 million and has been responsible for drilling over 500 wells that resulted in the discovery of over 42 million barrels of oil equivalent. Paul is located in Calgary, Alberta and is a principal shareholder in Energy 51 as well as being an active member of A.P.E.G.G.A.; C.S.P.G.; and A.S.P.G.
Randy Buchanan - Petroleum Geologist and Geophysicist
Randy is a principal shareholder and the President of Energy 51 and is located in Calgary, Alberta. Randy has held executive positions with a variety of oil and gas exploration companies over the last 30 years. As a Director and Vice President he has managed funds for the CMP Group of Funds, and was previously a supervisor for Gulf Oil.
Montana has many other prospective plays that are currently being assessed and should be announcing at least one more before year's end. Realizing that the demand for petroleum won't be subsiding any time soon, Montana Oil and Gas is determined to discover and manage production in the Alberta, Canada region and to become a long term dividend paying issue for its shareholders. For further information on the company contact info@montanaoil.com / 1-800-585-8762.
Energy stocks should clearly make up a portion of your portfolio but you must be selective about the stocks you select. Montana Oil and Gas is a company that is poised to take advantage of the current world situation and market pricing of oil and gas.
Brent Gushowaty
Emerging Stock Report
emergingstockreport.com
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