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Msg  139630 of 473315  at  5/16/2014 3:10:04 PM  by

pedriven


The next big oil field... and it's not in Texas? (E&C...Mississippian Lime play).

 
By Keith Kohl | Friday, May 16th, 2014

For anyone with a dime in the market right now, it's imperative to stay ahead of the curve and steer clear of the herd mentality.

If you were to blindly follow CNBC or the rest of the mainstream financial media, it's probably safe to say you'd always be late to the party.

Think about it...

Right now, there is a flood of articles and predictions swirling around the hottest shale plays in the lower-48. But by the time these outlets finally got around looking in the right places — the Bakken, Marcellus, and Eagle Ford —a small group of early investors like us was already banking its second, even third round of gains.

Now, I'm not saying there aren't a few hidden gems still left in these ludicrously oil-rich regions, but there's no question that the word is out now, and new investors are making them harder to find by the day.

Sure, you could see some modest double-digit gains if you chose the right company and sold your shares at the right time, but that would leave a lot to chance.

I'd prefer to make my own luck... because finding the next breakthrough shale plays could be far more profitable for individual investors like us.

And there is one tight oil formation that hardly anyone is talking about.

First, take a look at this chart...

oil production per rig

As you can see, the largest shale plays today are all listed, and their production numbers are soaring.

Of course, you and I have heard all about these plays in the media, and we would be hard-pressed to find investors that aren't scouring those areas for their next big winner.

Again, that's not to say there aren't opportunities, like this Bakken gem from way back in 2009...

clr chart 5-16

But for big gains like this today, it pays to find the next big field or technological breakthrough.

Thing is, you won't see the next major U.S. shale play on the first chart I showed you.

In fact, there's a strong chance you won't hear a word about it from the MSM right now, even though the oil there has been commercially viable for decades. In 2012, roughly one out of every five barrels of oil produced in Oklahoma was pumped out of this one formation.

Truth is, companies operating there have virtually reinvented this play, and the best is yet to come...

Spending on deepwater drilling is expected to rise from $43 billion last year to a whopping $114 billion in 2022.

I'm talking about the Mississippian Lime play.

The formation sits under more than 17 million acres in Oklahoma and Kansas and is relatively shallow, ranging anywhere from 3,000 to 6,000 feet below ground. And even though companies have been drilling wells into this formation since the 1980s, there was only one thing wrong: they were drilling in the wrong direction!

Just like the more famous tight oil plays I mentioned earlier, the rock underground was too tight for more conventional drilling methods. Once horizontal drilling was paired with multi-stage fracturing techniques like hydraulic fracturing, however, the real value in these formations was unlocked.

Now, we're certainly not talking about an oil play that is on the same scale as the Bakken or the Eagle Ford in terms of acreage or even reserves, but that has helped it stay off the radar of the investment herd... for now, at least.

Even though the Mississippian Lime isn't comparable in size to the more well-known plays, we're still talking about a potentially lucrative hot spot for shale activity going forward.

To start, it's much cheaper for companies to operate here. In the Bakken, for example, one well can cost upwards of $8 to $12 million apiece. Meanwhile, a single well drilled into the Mississippian Lime only runs roughly $3 to $4 million.

As you can probably guess, that's good news for drillers looking to pad their bottom line... and great news for smart investors looking to finally capitalize early on the undervalued companies in this area.

It's also why I'm releasing my latest investment report next week, highlighting five must-own oil stocks that have been grossly overlooked this year. It includes the name of one tiny driller with extensive acreage in sweet spots of the Mississippian Lime play.

And thanks to the lack of coverage by the talking heads in today's media, few people have caught wind of it...

 

Until next time,

Keith Kohl Signature

Keith Kohl



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Replies
Msg # Subject Author Recs Date Posted
139632 Re: The next big oil field... and it's not in Texas? (E&C...Mississippian Lime play). IronMike88 1 5/16/2014 3:23:19 PM
139633 Re: The next big oil field... and it's not in Texas? (E&C...Mississippian Lime play). Ed Ajootian 0 5/16/2014 3:58:06 PM
139651 Re: The next big oil field... and it's not in Texas? (E&C...Mississippian Lime play). NRP? dy2 2 5/17/2014 8:34:25 AM
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