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Unconventional Oil Production: The Wave of the Future



July 18, 2011 – Comments (0) | RELATED TICKERS: LSTMF , ARNBF

Conventional oil production peaked over 5 years ago. With that being said, unconventional oil production has come to the for front of oil industry. If you are hesitant to invest in unconventional oil, you may want to reconsider. U.S. unconventional oil production can be prime investments, and Devon Shire has 7 reasons why.


1) Little political or physical risk – I want oil exposure and I like to buy those assets at a discount, but I want to be able to sleep at night. Therefore I’m most interested in being invested in companies that operate in North America where for the most part government action or violence is not a large concern. There are plenty of unconventional oil resources inside of North America that are just starting to be developed.

 2) Avoid the risks involved in deepwater exploration and production – While I don’t feel adventurous enough to invest in reserves in unstable countries, I also don’t feel particularly comfortable owning oil reserves and production that involve operating in miles of water with expensive infrastructure that is in the path of major hurricanes. Unconventional oil plays allow me to avoid being exposed to another Macondo style event.

 3) No exploration risk – I love the idea of owning an oil company that hits on a giant oil discovery that immediately triples the value of the company. The reality is though that the wildcat oil exploration is high risk, and I have no ability to assess the likelihood of a successful outcome. These unconventional oil plays on the other hand are resource plays that have a broad areal extent and very little exploration risk. That is why you see companies like Petrobakken (PBKEF.PK) in Canada with a 99% success rate when drilling wells. They are basically repeatable manufacturing like operations."



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