October, 2008

Big Oil's Buyback

Dear Reader,

The financial news service Bloomberg recently reported on a crisis in Big Oil that'll forever change the way you get and use energy.

According to Bloomberg, in as short as 16 years, companies like Exxon and ConocoPhillips may no longer exist.

Here's a short excerpt from the report:

"There's a steady liquidation of the world oil industry... Exxon is buying back about $30 billion of its shares each year. If that continues, Exxon will have repurchased all its stock by about 2024."

In fact, the Big 5 (Exxon, Chevron, BP, ConocoPhillips and Royal Dutch Shell) are spending more on stock buybacks than they are on finding new oil.

This begs the question: With oil trading near $100 a barrel and demand soaring, why aren't these companies investing every penny they have exploring for more oil?

The answer will shock you.

We've been following this emerging crisis for 5 years... and here's what we've uncovered. Not only did we learn that Big Oil is preparing for the last days of its existence, but we also discovered that this situation represents one of the greatest investment opportunities of the 21st Century.

How much so?

Well listen to this: The International Energy Agency (IEA), an independent energy watch dog out of France, reported that the world will have to spend $20 trillion to meet surging energy demand.

Read that again: The world needs $20 trillion to meet energy demand.

Twenty trillion dollars is nearly the equivalent of 2-years' worth of US GDP... and is roughly 10x the size of China's stock market.

That's a huge amount of capital. And the select few who know where that money will be invested - and the companies that'll profit - stand to make a fortune.

Through our extensive research, we know exactly where, and how, all those trillions will be invested.

Take a look:

 

Bottom line - Energy is this century's first great bull market. Regardless of what tech stocks do, or if housing remains in the tank for years, the energy sector will outperform everything and make money for its investors.

Over a Barrel

You see, when the IEA said that $20 trillion needs to be spent to meet surging energy demand, what they really meant was $20 trillion needs to be spent to avert an all-out global crisis and war.

On November 7th, the IEA released its World Energy Outlook for 2007. Its contents sent shockwaves throughout the industry and sent the price of oil up $2 in a single day.

Here's what the IEA said:

"An abrupt escalation of oil prices after 2015 as a result of a global supply crisis cannot be ruled out.

. . . it is very uncertain whether new oil production in the period to 2015 will be enough to compensate for the natural falloff in output from existing oil fields and keep pace with the projected increase in demand.

The consequences of unfettered growth in world energy demand are alarming."

That's why Big Oil finds itself in a race against time to secure every last barrel it owns. By buying up all of their shares, not only will they control the billions of barrels they currently own once the supply crunch hits (assuming it hasn't already)... but they'll also profit handsomely as the price of oil continues to skyrocket from insatiable demand.

Let's be clear about this - the world has never experienced an event this severe. What is unfolding in front of our very eyes is a crisis of epic proportions.

Earlier in 2007, the world's top oil investment banker and former energy advisor to Bush and Cheney -Matthew Simmons- told a stunned Bloomberg audience that oil could reach $300 a barrel, and...

"... I am firmly of the belief that over the course of over the course of the next year or two, this issue of peak oil will replace global warming as an issue that we're all worrying, debating and talking about." -Matthew Simmons on Bloomberg

Recently, Simmons was quoted saying...

"This [oil] crisis, leads to social chaos."

We couldn't agree more. In fact, we're already seeing signs of unrest. In Nigeria, more than 1,000 foreign oil workers have been either kidnapped or murdered in the last 3 years.

In October, a man in China was killed when a riot occurred over diesel fuel rationing.

And in our hometown of Baltimore, not too far from our office, a fuel tanker was stolen at gunpoint.

Criminals know where the profit opportunities are...

And so do we.

To get the FULL report click here.

 

You can download the PDF version here: Big Oil's Buyback

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