Golden Age for the Independent Oil and Gas Operators

We have been hearing groans from the large oil companies as they pack their bags to move overseas.   While the role of large oil companies in the USA may be diminishing, in the opinion of David Mangum, we are entering a window of opportunity for independent oil and gas companies and private investors. Mr. Mangum is a petroleum engineer with the Energy Exchange.

 

Here are some reasons why he believes we are entering a “Golden Age” for independent oil and gas operators in the USA:

1.        Major oil companies have rightly concluded that the large-easy-to-find on-shore oil fields have already been found.  

2.       Large oil companies must spend large dollars on large projects.  They simply cannot spend small dollars on small projects, regardless of the quality of the project.  This leaves the small projects for the small independent oil companies.  Mangum added “ When the king leaves the dining hall, there is still plenty of food on the table.”

3.         Since the BP oil spill in the Gulf of Mexico, the government has sent an unwritten message to offshore drillers to get out of the Gulf.  So these rigs are being moved overseas (after laying off American workers, of course.)  

4.       Pressure from environmentalists has resulted in reduced drilling in the USA by the large companies.

5.        In our litigious society, the large oil companies are magnets for big lawsuits.  While the small oil companies are not exempt from lawsuits, the smaller companies have an advantage in this area. 

6.         Many small projects that were not economical at yesterday’s prices have become highly profitable at today’s prices.  

7.        The worldwide demand for energy is rapidly increasing.  China and India are becoming energy gluttons (like the USA); this increases the pressure on the world’s diminishing oil reserves.

8.        Many technologies, once only available to large companies, are now available to small oil companies.   Oil can now be recovered from fields that were once uneconomical .

9.        With the exodus of major oil companies, there is less competition for domestic oil leases.

10.   Banks were once a source of funding for small oil companies; however, this source of funding has practically dried up.  This opens a window of opportunity for small energy investors. 

Mr. Mangum spent the first twenty years of his career working as a petroleum engineer /geologist for Fortune 100 energy companies, including Mobil and Shell.   Since starting the Energy Exchange in 1983, David Mangum has focused his career on small independent oil companies.  Currently, there are multitudes of opportunities for these small companies but only if they can get funding.  Similar to Real Estates Multiple Listing Service, the Energy Exchange connects investors to good energy projects.    When the Internet came along, he created the petroleum industry’s first commercial website, www.enex.com, which is an on-line Multiple Listing Service of available energy projects.