Why invest in oil and gas?

(courtesy of OilPods.com)

Oil is one of the most important natural resources known to mankind. For most societies in the world, oil is the principal natural resource that fuels their economies.

Then why, in this great age of communication and technology, do we need to be concerned about a natural resource like oil? Simple. Nearly 98% of everything you have or do is in some way related to crude oil. Heat for your home, gas for your car, 2 liter plastic bottles for pop, and petroleum jelly are just a few examples of products created from crude oil.

The United States has the greatest standard of living in the world, as well as the largest economy. Why? Because we have always tried to maintain control over the supply, as well as price, of oil. Over the last 10 years, the U.S. economy has underwent the largest economic expansion in history and cheap oil has fueled this unprecedented growth. Unlike the 1970s, when the U.S. was held at bay by OPEC withholding oil production for political reasons, the growth of the oil industry during the 1990s, and beyond, will be more likely be determined by the laws of supply and demand.

As democracy and capitalism are spreading around the world, global oil consumption is at record levels. Throughout Latin America , Russia , India and Asia , economic growth is accelerating at a remarkable pace; much faster than anything we have seen in the U.S.

Recently Forbes described the development now exploding across Asia :
"You can almost smell the money in Shanghai , Bangkok , Kuala Lumpur or just about any East Asian commercial center outside Japan these days. Traffic snarled, construction booming, glitzy shopping malls showing the latest Hollywood movies...These formerly traditional societies, stagnant for centuries, are exploding into the modern capitalist world and spawning vast new middle classes with a taste for consumer goods and the means to indulge that taste. Healthy economics generate great wealth, and Asia is churning out billionaires as though on a conveyor belt."

Here is what appeared in a special issue of Personal Finance:
"In these countries, more than two billion people, or more than 40% of the world's population, are suddenly entering the age of consumerism. Thanks to American movies, TVs and VCRs, they have seen what the rest of the world has and they want it all. "They want McDonald's french fries. They want Coke. They want Levi jeans. They want Caterpillar tractors. They want cars, cameras, mouthwash, homes, toothpaste, Tide, aspirin and ten thousand other products we take for granted. "In vast regions of these countries, they're starting from the raw basics of modern life. They need electric power, running water, sewage treatment plants, bridges, tunnels, roads, cities -- you name it. "And oil is the one commodity absolutely essential to this tidal wave of global growth. It's literally the blood supply of capitalism. If you're a developing country, you need all the oil you can get to drive your trucks, your cars, your planes and ships. You need oil to run your factories, machines and power plants so necessary to a modern industrial economy. "What we're seeing is the first simultaneous, worldwide economic expansion since the late 1970s. But this time, many newly industrialized countries are joining the party and importing an unending procession of super-tankers laden with lack gold."

I have no knowledge of the oil industry and therefore am skeptical of the potential it has. How are profits made?

It is common knowledge that most present day conflicts are fought over the discovery of oil and the rights to mine the site thereof. The Spratley Islands and the recent conflict in the Middle East is a case in point. Owning the mineral rights of a land gives the owner/owners the rights to mine the minerals and to profit from it. If nations go to war over such mineral rights, its stands to reason that possession of it brings the owners great wealth. Indeed it always has been a cherished proportion in the portfolio of the wealthy. Now, through a unique program managed by Oils land International Inc. and marketed through OilPods.Com, this opportunity to participate in the ownership of Working Interest of established and producing oil fields are now within the grasp of many.

What is the guarantee of my investment?

A title called the Working interest (WI) of the Oil lease is transferred to your name from the respective U.S. Government’s County office. You become the rightful owner with all rights, privileges and benefits from ownership of the WI. This WI is a freehold title.

How do we get our returns?

Generally once the oil is out of the ground and into the holding tanks, it must be sold. Each holder of a working interest has the right to take his portion of production in kind, and make his own arrangements for its sale.. The operator of the Working Interest will advise the buyer of the oil production as to the identity and extent of ownership of each of the holders of the Working Interest, as well as the identity of the royalty holders and the amount of their interests.

The information will be compiled on division orders, which are the basis upon which the buyer of the oil can divide the proceeds of sale among the various holders.

The buyer of the oil will pick up the oil from the holding tanks at periodic intervals, gauge it and remit the remaining proceeds in the proper amounts to the holders of the Working Interest and the royalties.

However, due to the unique proportions of Working Interest sold by Oils land International Inc. the company has collectively entered into an agreement with the buyer of the oil production for all the holders of the Working Interest, and will distribute the proportions paid out by the purchaser of the oil production to the respective holders of the Working Interest through their marketing agent, OilPods.Com.

What is the risk?

Revenue from the oil and gas production is paid according to the current price of US crude oil or gas. Presently the average price of crude (BOPD) is US$70/ and gas (mcf) is US$7/-. The market must correct by almost 200% before an investor is deemed to be Out-of-the-money. Even under such circumstances, as the Working Interest is freehold, it is a matter of time before market corrects favorably and revenues continues.

There has never been a better time to invest in a WI of an Oil and Gas lease. Price of oil barrel is at US$70. Gas prices are stabilized well over $7.00/- mcf. Our projections are very conservative and at the current prices of oil and gas, returns are well over 15% pa.

What if there is no oil in the ground?

In our present offering, Powder River Basin is a locality, rich with Coal Bed Methane Bed seams from which we get CBM gas, a form of Natural Gas. One only need to research into the internet and one would easily find a plethora of information confirming the abundance of these reserves in that locality. PRVB owns 9000 acres of this mineral rights in this area.

What if Powder River Basin Gas Corp.(PRVB) becomes insolvent?

Your portion of WI is independent of those held by PRVB Should there be a need to liquidate our proportion, it will not affect the portion of Working Interest held by the investor. Therefore the purchasers of the oil and gas production will still distribute revenues according to the proportion held by the individual investor.