Monterey Shale Investing

Jeff Siegel

Written By Jeff Siegel

Posted June 10, 2013

Quite frankly, I think the whole thing is being blown out of proportion.

I’m referring to the notion that some great Arctic oil rush will open up the floodgates and usher in a new era of cheap and abundant oil.

First of all, it’s not going to be cheap. Arctic oil production is prohibitively expensive (right now, anyway), and I wouldn’t put too much faith in bold claims of abundance and never-ending prosperity.

Don’t get me wrong; roughly 13% of the world’s undiscovered oil and 30% of its natural gas can be found beneath the icy waters of the Arctic. And over the long term, production costs will make sense. This is why so many major oil players are laying the groundwork now for Arctic production.

In fact, just last week we learned that Russia, Norway, and Finland are looking to create an investment fund designed to provide the capital necessary to tap billions of barrels of oil and natural gas. And it looks like OAO Gazprom, Statoil ASA (NYSE: STO) and Total SA (NYSE: TOT) could be among the biggest beneficiaries of this fund.

But there’s much more to this story…

California Will Get Fracked

While the Norwegians and the Russians continue to dig deep into the salty ice for access to a wealth of Arctic oil, the U.S. has, for the most part, thrown up its hands.

Sure, Exxon (NYSE: XOM), and other U.S. companies will seek access to some of those Russian parcels. But for the most part, American producers know that right now, the gettin’s good in shale — not ice. And no matter where you go in the country, the shale boom continues.

Heck, just last week California lawmakers balked at pushing a bill that would ban fracking in the Golden State. Despite objections from residents and environmentalists, there’s little doubt that California’s about to get fracked. After all, we’re looking at a potential 15.4 billion barrels in the Monterey Shale alone. That’s about 60% of the nation’s shale oil reserves.

Lawmakers know with that much oil sitting below their feet, they will have little trouble raising revenue in a state that has had its fair share of economic woes.

Of course, progress isn’t going to happen overnight. And while my colleague Keith Kohl is actively developing new ways for you to play the Monterey Shale, there’s another goldmine in California that can deliver some pretty fat profits in the near term…

$710 Million California Payday

This one isn’t actually an energy play, but rather a backdoor biotech play.

You see, not many people know this, but there are hundreds of different drugs in the marketplace that rely on a steady supply of a special compound called Keyhole Limpet Hemocyanin (KLH). This compound can be found in a range of drugs treating everything from cancer to Alzheimer’s to Crohn’s disease.

But there’s a problem. This particular compound only comes from one place: the blood of a certain type of sea snail that can only be found off the coast of California.

And apparently, there are only about 100,000 of these sea snails left. Once they’re gone, they’re gone. And along with their extinction comes the extinction of all those drugs that need KLH to work.

Of course, there’s a boatload of cash to be made in KLH. We’re talking as much as $900,000 per gram! So it’s no surprise that with this potential crisis comes a massive opportunity…

Now, while KLH is too big and complicated to successfully synthesize, there is a way to extract KLH from these sea snails without the animals dying. In fact, they can even continue to live for up to 35 years.

And one company, dear reader, has the only patent on this process.

Based out of California, this $0.60 tech play has already signed agreements with seven of the 15 largest pharmaceutical companies in the world — and is now sitting on a potential $710 million in annual revenue.

You can take a closer look at the numbers here.

Although I’m primarily an energy guy, this is an opportunity that I have not ignored. In fact, for the sake of full disclosure, I took a position in the company earlier this year. It’s just one of those rare finds that’s too mouthwatering to pass up…

Even if you’re not into biotechs, I strongly recommend just taking a few moments to look at some of the technicals on this one, as this is probably some of the easiest money we’ll make all year.

To a new way of life and a new generation of wealth…

Jeff Siegel Signature

Jeff Siegel

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Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor’s page.

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