My Last Texas Oil Pick
Skyrocketed from
$3 a Share to $23…
in Just 2 Months.

 

My Newest One? It’s in the Exact  Same Oil Formation, and I’m Going  To Share It With You Today

Imagine owning a stock that goes  from $3 to $23 in only 60 days.

Look at the 2016 stock chart of  Resolute Energy (REN:NYSE). That’s the kind of chart that creates  millionaires -really fast.

 

 

On July 8, Resolute announced stellar drilling results—results so good, they could pay back the cost of their wells in just 8-9 months—at today’s low oil prices!

Most companies today are ecstatic about 24 month paybacks.

Yes, on Friday July 8, the company changed—forever. But it did more than that.

It also changed an entire basin, and really—it changed the oil landscape of the entire United States. It’s pretty easy to explain.

I was following the stock closely then… but I want to tell you how and why the stock moved so quickly – A 760% jump – in so little time.

That Friday, the stock jumped 28% on 620,000 shares, about 4-5 times normal volume. The company still had a market cap of just $60 million.

In the next three trading days, the stock doubled to $7.60-and that week it traded its entire issued share amount-twice!

After the results came out, I bought stock at $5.60 and again just over $7. Then, exactly one month later, on August 8 2016, the company announced more spectacular well results – and the stock jumped to $16!

Guess what I did then?

I bought MORE!

I did that for one simple reason – when wells payback their capital cost in 8-9 months, producers never have to raise equity or add debt to grow.

“Payback” is my #1 criteria for analyzing energy producers. And Resolute cracked the code of their Delaware Basin play so well, they were able to get fast paybacks.

They instantly transformed from a zombie stock headed to bankruptcy – to one of the most profitable and sustainable oil producers in the country!

Most investors thought the stock ran up because of a short squeeze. But I knew the real value of that Delaware Basin land. It only took 5 minutes of simple math.

Then on September 1, the company said they would update their presentation that night before two big investor conferences.

Not only did the company show two new great wells… their data showed that the old wells were hardly declining at all.
That’s not supposed to happen with tight oil wells!

Production is supposed to fall off a cliff right away. But that isn’t happening with Resolute wells.

The stock soared to $24 on that news, and I took my first profits at $22.

I’m not telling you this story to show you how much money I made.

I’m telling you this so you understand how special the geology and the economics are for the Delaware subbasin in the Permian Basin.

Yes, me and my subscribers have made hundreds of thousands of dollars in a short period of time. And being invested in a stock when it makes a run like that is really exciting.

But this story is about geology, and how the Delaware Basin is now the #1 Oil Play in North America.

Land values are soaring right now. I talk to management teams trying to buy land in the Delaware now and they tell me land is sometimes going up $1000 per acre per day.

That’s crazy! But it’s incredibly lucrative if you already own a fat chunk of land in the middle of it.

I know a company like that. But only one – in fact, I’m sure it’s The Only One Left.

 

The Delaware Basin Gem: IT’S THE LAST ONE

 

It’s a company that I call my “Delaware Basin Gem”.

Not a single analyst follows this company – yet.

That’s because it’s a micro-cap. But it has Large Cap Management – the Chairman’s last company grew to $3 billion in market cap.

And he personally wrote a 7-figure check to buy stock in my Delaware Basin Gem.

Micro-caps are where the Huge Gains are for investors willing to make the effort.

This company has land in the core of this very same Delaware Basin play as Resolute – whose share price skyrocketed on great drill results.

There is drilling going on all around this little gem of a company. And they themselves are starting their first drill program—very soon.

Nobody knows this company exists, because it’s small, and because it’s new, and because management funded a lot of it themselves.

Really, the only people who know about this Delaware Gem are My subscribers and me.

You too can be part of this exclusive group—provided you are willing to move quickly. If this stock has a Big Move Up—well, I can’t let any more new subscribers in if I don’t think they’ll make money.

This isn’t a rare opportunity—it’s unique. Only the Big Boys own land in the super hot Delaware Basin— except for this Undiscovered Gem.

I’ve spoken with Chairman, the CEO and the main consulting geologist. From that plus all the security filings I’ve put together an amazing report on this Delaware Basin Gem that tells you why I got greedy on this stock.

I’ll tell you how to access my full report in a minute.

But first, you should understand how these new Delaware Basin results have changed The Oil Game in the entire USA.

 

Oil is Cheap. So Why Are Companies Paying
$ 27,000/Acre For Delaware Basin Land….

 

Let me give you some context.

Do you know what land in the Bakken is worth if oil stays at $45 for the next  ten years?

Absolutely nothing.

That isn’t an exaggeration. It is the absolute truth.

Spending money drilling and fracking Bakken oil wells at $45 per barrel is  as good as setting that money on fire.

That is why there are no deals taking  place in the Bakken.

There is no demand for those assets.

The Eagle Ford is exactly the same.

There is no future in these plays at these low oil prices.

That is why every single onshore oil producer is scrambling to get a piece  of the Delaware Basin—and leaving  plays like the Bakken, the Eagle Ford,  and the Niobrara—behind.

The large Delaware Basin is now a play that works shockingly well at $45 per barrel oil. In fact, only the STACK play in Oklahoma can generate cash  flow like the Permian now.

The truth is, this large Delaware play will steal capital and talent from all  those other US plays. It’s a game changer. The success in the  Delaware will only quicken the demise  of the once mighty Bakken.

Billions of dollars will now flock towards the Delaware—it’s happening  already.

 

The Permian Basin Is The Place Where Everyone Wants To Be

 

The Delaware Basin is part of the Permian Basin.

The Permian has always been The Granddaddy of oil plays in the US.

 

 

 

But just because it was so rich with oil, with so many layers of productive formations…there was no need to innovate; to improve it.

That’s why it was actually the last US oil play to use horizontal drilling. And even then, the Market thought that it would be only the eastern Midland sub-Basin that had the truly exceptional economics.

This year we have learned that the western Delaware sub-Basin can provide paybacks as good as the Midland.

These two oil plays both generate excellent returns even at current depressed oil prices.

That is why companies are paying up to $30,000 per Delaware Basin acre in a world of $45 oil.

The exceptional economics of the Permian are driving production UP— even at $40 oil—and stealing capital from every other play in the country.

While the Permian is increasing production, other major horizontal plays have production in free fall.

 

 

Executives at every company will tell you that their company has great assets.

But actions speak so much louder than words.

Producers in the Bakken and Eagle Ford are laying down their rigs and not drilling.

Companies operating in the Permian are able to not only keep drilling, but to keep making money while drilling.

 

 

In the five year bull market that led to the oil crash, the horizontal oil business was simple. Companies had unlimited access to cheap financing.

Bonds, bank loans, equity issuances… no problem.

At $90+/barrel oil prices, everyone was thrilled to give companies money to drill new wells. That is why the United States energy industry unleashed such a torrent of production.

Those days are long gone. The rules of the game have changed.

Now, fundamentals matter. Money is only available to the companies that truly have the lowest cost assets.

These are companies that don’t actually need the external sources of cash because they can live within their own cash flow thanks to the economics of their oil play.

That used to be just the Midland Basin in the Permian.

But now it’s the large Delaware Basin as well, thanks to the Resolute breakthrough—and that is a killer for other US plays.

That is why Delaware acreage is worth $30,000 per acre today—and could easily double from there, I think, despite the decimated oil and gas sector.

$30,000 per acre with a paltry $45 oil prices. Nobody would have guessed that. It’s great news for companies who already have land positions there.

Even at these very low oil prices Delaware Basin wells can generate excellent returns.

At high oil prices these wells will generate incredible returns and allow companies in the play to grow at astounding rates.

Companies like my Delaware Basin Gem are going to be able to drill wells that pay out the capital invested very quickly.

Fast payout times is what allows these companies to grow—and grow production and cash flow per share.

It’s per share growth that drives share price performance.

 

The Most Valuable Layer Cake in the World

 

What makes the Delaware and Midland Basin special? Layers and  layers of oil. The Permian is the most valuable layer cake in the world.

There is an incredible number of oil bearing formations that exist on the same piece of land.

Where other horizontal plays have two or three formations that might be able to produce oil profitably…
The Permian has nine… and by some estimates up to 12.

 

 

That means that all of these different  formations can be accessed from the same drilling pad.

They can all use the same pipeline  infrastructure. They can all use the same processing facilities.

This creates incredible efficiencies.

Once the company has paid for all of these things once it can use them to  produce from all of these different formations.

That is why this land is so valuable.

When you own one acre in the Permian you aren’t really owning just  one.

It is more like you own nine.

But you keep the same costs of development you do when you own one.

That is why companies are willing to pay so much for this acreage.

That is why I’m so excited about my Delaware Basin Gem.

I pulled this clip below from the most recent Pioneer Resources corporate  presentation.

 

 

 

Delaware Basin acreage with no production is selling for $27,000 per acre. And I think it’s headed to $40,000 and more—fast.

That is extremely fresh data—most of the transactions have taken place in the last few months.

How can that be when we are two years into an oil crash? When the entire industry is starved for capital?

The answer is pretty obvious.

Oil wells in the Delaware Basin make a lot of money at current oil prices.

At higher oil prices—where the Bakken and Eagle Ford barely start to work—these Delaware Basin wells will gush cash flow.

That is why Resolute Energy’s share price has skyrocketed—760% in two months.

The Market has seen the production type curves, crunched the numbers and is now fully aware of the economics.

That is why I’m so excited about my Delaware Hidden Gem subscriber pick.

This little company controls a significant chunk of this valuable play.

But they bought it when land prices were low, when no one was looking, from another company no one cared about.. which is why the stock market is completely unaware of it.

Even now, after all the success Resolute has had, it is not followed by any analysts and it’s still too small for institutions to even look at… It isn’t hard to figure out what this little company is worth.

You can just look at how many acres it has and multiply it by the price being paid for offsetting land transactions.

That would be about $27,000 per acre wouldn’t it?

That creates a value that, at the time of writing, is multiples of where the company currently trades.

Like I said, nobody knows about this company. No analysts. No momentum traders.

Just me, my subscribers and a few savvy oil sector investors.

And now of course you… if you are one of the first people who sign up for my full report on this Delaware Basin Gem.

 

How Did This Company Manage To Lock Down This Highly Coveted  Acreage?

 

You likely have a question for me.

Just how exactly did a company so small that it has no analyst or institutional following manage to get this prime piece of real estate?

How did it beat all of the other oil producers that are desperate to get into this play?

Hey….I’m glad you asked!

What you need to know is that nine months ago the economics of the Delaware Basin looked very different.

The code to the spectacular economics that the play is now showing—had not been “cracked” in 2015.

It wasn’t that the wells coming out of the Delaware Basin weren’t interesting in 2015—they just weren’t exceptional.
The coming-out party for the Delaware Basin happened mid-2016.

Everyone knew that Resolute Energy had significant Delaware Basin assets.

But it wasn’t until early this summer when the company released new drilling results that the market cared.

In those results Resolute revealed new production rates that meant that its Delaware Basin wells would recover 50% more oil than originally expected!

That is quite a change in performance…

Especially considering that the cost of the wells didn’t increase at all from prior expectations.

That is why Resolute’s shares— priced for bankruptcy at $3 for so long —skyrocketed to $23 in two months.

The management team of my Delaware Basin Gem locked down this acreage late in 2015—before well results like Resolute’s were publicly known.

And before the frenzy of Delaware Basin deals started up.

The team running my Delaware Basin Gem wanted to buy what I call a Zombie Company in 2015—a company near bankruptcy but had a good asset.

They found one with a company that had breached its loan covenants; the company was in default.

Foreclosure was imminent. The company was within days of having all of the value of its equity wiped out.

That is when the management team of my Delaware Basin Gem swept in.

With no other bidders for this company, and bankruptcy looming this management group was able to strike an incredible bargain for these assets.

These Delaware Basin assets were acquired for next to nothing.

All of the stars had lined up.

With the distress in the oil sector there were no other buyers. The value of acreage in the Delaware Basin had not yet been established.

It was a smart management team, in the right place at the right time.

 

I’ve Seen This Movie Before… And Loved It!

 

How this Delaware Basin Gem was formed is a carbon copy of one of my best wins ever in junior energy stocks.

It’s a great strategy—for the right team. The team behind my Delaware Gem are experienced oil and gas managers.

With decades of experience they are connected to virtually everyone in the business.

At prior companies they have been involved with writing 7 figure cheques.

What they decided to do with this company is—downsize.

They didn’t want to compete for assets with deep-pocketed oil and gas heavyweights.

So they looked for assets in the micro -cap world—where companies are distressed after two years of oil being in the dumpster.

Here, there is little to no competition and massive opportunity.

In 2013 I had a situation very similar to what we are looking at today with this Delaware Basin opportunity.

I was very familiar with an oil executive named Kevin Adair.

Adair had already built and sold a company called Spry Energy to Whitecap Resources for almost $300 million.

I knew Adair, and knew him to be someone the Street considered a Tier 1 management team.

Very similar to the management team at my Delaware Basin Gem.

I’m always following the top entrepreneurial management groups.

Adair put his own money into the recapitalization of a company at just 5 cents per share. And then he opened it up for other investors who knew him.

I jumped in with both feet, and my subscribers were also able to buy the stock at that price or slightly above.

Adair’s first deal involved getting paid to take a property off the hands of a group of inexperienced investors who were in over their heads.

Literally, they paid him to take this troublesome assets off their hands.

They didn’t know how to operate it. Adair did.

That paid off immediately with the first well on the property becoming a boomer.

His next acquisition was one of the best deals I have ever seen.

Adair bought a company out of bankruptcy that had spent over $20 million on a conventional asset in Alberta.

That sounds familiar to what my Delaware Basin Gem management team did in late 2015 doesn’t it…Adair paid $750,000 for the land package and infrastructure—which had $20 million worth of development!

Plus oil and gas in the ground.

The wells were cheap, the returns were great.

After a 6:1 rollback that 5 cent stock turned into 30 cents…and the stock— called Canamax—skyrocketed to $1.90.

This is what happens when a shark gets let loose in the minnow pond.

It is easy pickings.

My Delaware Basin Gem picked up highly coveted assets for a fraction of what they are worth today.

The Market isn’t blind…it’s just not looking at companies this small right now.

That will change—especially when this company starts drilling in late 2016. It will only take one well with Resolute-style paybacks to turn this stock into a Market Darling.

When it does I expect that my subscribers and I are going to enjoy another Canamax type experience.

Another Resolute Energy type experience.

You can come along for the ride if you are one of the first people to sign-up for my report on this, the Delaware Basin Gem.

I can’t stress this enough… It’s The Last One in the Delaware. I don’t want you to miss it!

 

If You Were The Smartest Horizontal Oil Man In The World …Which Play Would You Pick?

 

 

 

The most respected horizontal oil man in the United States is Mark Papa.

That is not an official title, but I doubt anyone would dispute it.

From 2000 until when he retired in 2013 Papa ran EOG Resources (EOG:NYSE).

And he did it masterfully.

Under Papa’s guidance EOG became the single largest producer of oil in the Lower 48 States.

Today EOG is the leading horizontal oil producer by a significant margin.

More important than that, Papa built EOG’s horizontal oil production the right way.

Not with buckets of debt and questionable profitability.

But with a constant focus on drilling profitable oil wells.

I know you would think that would be how everyone operated during the horizontal oil boom… …but sadly that wasn’t the case.

Papa retired as EOG’s CEO in 2013 and left the company entirely in 2014.

Earlier this year he re-emerged as the CEO of a company armed with $500 million of cash…

And the intention of buying the best possible horizontal oil asset.

Can you imagine that?

The world’s top horizontal oil man armed with a big cash hoard two years into an oil collapse.

He must have been like a kid in a candy store with the opportunities that were presented to him.

So what did he buy?

A company that is 100% focused on the Delaware Basin.

He bought a company that my little Delaware Basin Gem has acreage right beside.

Here is what Papa said at the time his acquisition was announced.

“Since our IPO, we have been searching to acquire a meaningful position in one of North America’s premier oil shale basins. There has been a lot of recent excitement about the Delaware Basin, but we believe its potential is still significantly underappreciated.”

I couldn’t hope for a better seal of approval on the land that my Delaware Basin Gem controls.

If you are one of the first 100 people to sign up for access to my free report on this company you can see exactly where that land is.

As well as exactly which big oil companies are drilling around it.

 

Yes! Send me The Last MicroCap in the Delaware Basin—NOW!!!

 

An Undiscovered Gem Remains Undiscovered Until It Isn’t

 

My Delaware Basin Gem wasn’t just good.

The company was also lucky.

If the deal to acquire the distressed Delaware Basin competitor hadn’t been struck at the end of 2015 this company would never have gotten into this play.

As they say… …timing is everything.

Delaware Basin acreage prices have subsequently skyrocketed.

There will be no more opportunities like that one in the Delaware Basin.

The question now become—when does the market discover the assets that my Delaware Basin Gem is holding?

There’s a few answers to that question—and here they are:
1.When they announce their first drill results
2.When anyone around them—and the Whos-Who of US oil is all around them—announce any drill results
3.Any merger or acquisition near them.

I expect #1 to happen late 2016. But #2 and #3—could happen anytime. And then my Delaware Gem—THE LAST ONE—will be dramatically revalued by the market.

That’s what happened to Resolute Energy was earlier this year when the true value of its Delaware Basin assets became apparent.

What’s the Big Risk here? Waiting. Waiting to take advantage of this opportunity is the risk here.

So I don’t know exactly the timing of when this plays out—but I do feel pretty confident how this plays out.

With any successful drilling, my Delaware Basin Gem will get acquired —likely for a big premium due to its small market cap.

Land in this play is just too valuable for it not to happen.

Oil and gas producers don’t know if oil is ever going back to $70/barrel.

Companies must be able to make money at lower oil prices.

That’s why every single company needs acreage like this.

The Delaware Basin is one of the very few places that drilling opportunities like that exist.

That puts anyone interested in getting long this company on a ticking clock.

Remember, my first Delaware Basin subscriber pick was Resolute Energy – a monster success story.

Another successful micro-cap subscriber pick was Canamax, which delivered a 600% gain. That situation is very similar to what my subscribers and I have in front of us today.

All you need to do is click the link below and sign up for my full report on this Delaware Basin Gem.

There’s only one catch:

I can only show this report to the first 100 people to respond, so please move quickly on this one. If my newest Delaware Basin pick is anything like my last one…

You could find yourself making multiples on your investment…in very short order.

My comprehensive report on The Last MicroCap in the Delaware Basin is reserved exclusively for subscribers to my Oil & Gas Investments Bulletin.

As a subscriber, you will learn more on my conversations with the CEO, my comments on all upcoming drill results and any new M&A activity that will impact the stock.

As a subscriber, you will also receive:Regular Issues of the Oil & Gas Investments Bulletin: You’ll get full updates on the positions in my personal portfolio — what I’m buying, what I’m selling, and why.

In other words, every time I make a move, I’ll show you exactly how to get into position for profits.

Buy / Sell Alerts: You’ll get these alerts sent directly to your email inbox. That way, you’ll have the opportunity to take quick action on your tradesQuarterly conference calls — These are live Q&A sessions where subscribers can get updates directly from me on any position in the OGIB portfolio.

Interim Bulletins: I’ll send you these updates whenever I have a timesensitive insight to share that could impact an existing position, or set the stages for a new position.

24/7 Members-Only Web Access: You’ll get a dedicated password for accessing the OGIB portfolio, along with every weekly issue, Buy / Sell Alert, Interim Bulletin, Special Report, and Guest Commentary I’ve ever published.

And – as soon as you sign up below  — you’ll get access to this unique  trade—The Last MicroCap in the  Delaware Basin.

Kind regards,
Keith Schaefer
Editor, the Oil & Gas Investments  Bulletin
Click on the Button below…before  everyone else does!