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Why Invest in Oil and Gas?
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FEBRUARY 26, 2007
Don Allen
Chief Executive Officer
American Energy
Resources Corporation |
"At American Energy we harvest American
oil from American soil. As demand rises and the politics of oil become increasingly uncertain, cultivating domestic sources is not only good for the country, it makes sense; owning domestic sources with domestic refining mitigates risk and improves marketability. This is one reason Colorado is third in domestic drilling activity, just behind Oklahoma and Texas-savvy investors are taking action." |
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IT IS DIFFICULT TO IMAGINE A WORLD WITHOUT PETROLEUM. Applications for petroleum and petroleum products are found in building materials, shipping, roadways and warfare. It is critical to the medical, chemical and agricultural industries and provides the raw material for innumerable products including solvents, fertilizers, pesticides and plastics. Above all, it dominates the world energy market.
Our passion to cultivate the flow of oil from the earth is fueled by the increasing global demand for oil that drives this industry. According to the U.S. Energy Information Agency (EIA at http://www.eia.doe.gov), world demand for oil is expected to increase by 54% in the first twenty-five years of this century. To meet that demand, the world's oil-producing countries will have to provide an additional 44-million barrels of oil each and every day by 2025. We believe that the insatiable global demand for oil creates a tremendous opportunity for our company.
Is there principal risk? Yes, but investing in an oil and gas program also provides substantial tax benefits, and the potential to recover the initial investment and earn monthly revenue. Oil & gas investments are non-correlated assets that can contribute stability to a diversified stock portfolio. Our job is to mitigate risk with knowledge, process and experience. Experience is the key to success; knowing what is happening at the wellhead and at the bottom of the well bore. That is where our value lies.
How Do I Invest in Oil & Gas Right Now?
The wealth-building stream for the next five years is the energy sector. Everything that drives prices up makes the development of domestic oil and gas fields more cost effective, building potential for real returns.
The amount of revenue that can flow from a 7-7/8 inch hole drilled 6,000 feet into the earth can be staggering. However, investors must be selective. Many programs involve multiple operators and brokers, diluting returns. Like Getty and Rockefeller before us, we believe that building enduring, multi-generational wealth means eliminating the middleman and grabbing a piece of the flow.
Our partners invest directly, right at the wellhead with us. We manage over 47,000 acres of mineral rights, actively developing proven oil and gas fields. We refine locally and manage our own purchasing contracts, further reducing your cost of ownership. If oil and gas is right for you it makes sense to work directly with an independent owner-operator.
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Supply & Demand:
World Oil Markets Under Pressure
Reprinted from: CBC News Online, April 2005.
Much of the growth in demand-about 40% says the Energy Information Agency, will come from Asia. Its daily oil fix is expected to double by 2025, thanks mainly to rapidly growing economies in China and India. In 2004, China passed Japan as the world's second-largest consumer of oil. It ate up an average of 6.63 million barrels of oil every day, about twice what it produces.
Its oil imports doubled between 1999 and 2004. China's demand for oil is expected to continue to increase by five to seven percent a year. If that happens, China will surpass the United States as the world's largest consumer of oil by 2025. Similarly, India's oil needs are expected to grow by four to seven percent a year. In 2004, it consumed two million barrels a day.
Much of the growth in demand-about 40% says the Energy Information Agency, will come from Asia. Its daily oil fix is expected to double by 2025, thanks mainly to rapidly growing economies in China and India. In 2004, China passed Japan as the world's second-largest consumer of oil. It ate up an average of 6.63 million barrels of oil every day, about twice what it produces.
An investment in an oil and gas drilling program involves a substantial risk of the loss of all or a part of the monies invested, as well as possible liability for amounts over and above the amount of the investment. Prospective participants should carefully consider all risk factors in determining whether the investment is suitable for them.
These discussions may contain statements which may be deemed to be "Forward-Looking Statements" within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange. Forward-looking statements involve inherent risks and uncertainties. The reader is cautioned that a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to: increased competition; industry restructuring initiatives; legal, regulatory, economic or other factors; changing market conditions; trade, monetary, fiscal, taxation and environmental policies of governmental bodies; availability of supplies of oil and or natural gas; the comparative cost of alternative fuels; availability or cost of capital; and various other factors beyond the control of American Energy Resources Corporation.
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