______________Investing in Oil and Gas Wells

The problem with ethanol

JAB — Thu, 21 Feb 2008 22:20:00 -0600

CNN did a 'broken government' special on how ethanol is being pushed for political purposes but doesn't solve environmental issues or dependence on foreign oil. It was an enlightening look at of how ethanol doesn't work but is being sold to the American public. Points made:

- ethanol plants are run on coal, one of the worst polluting fossil fuels.

- making ethanol requires 29% more fossil fuel than energy that comes out.

- cars run on ethanol require 20-30% more fuel.

- the government is planning to subsidize ethanol production (our tax dollars) to the tune of $5 billion per year.

- if all the corn in the USA was used for ethanol, it would only account for 7% of the fossil fuel used.

- and guess where a great deal of corn and ethanol is produced? - Iowa. I have you heard of the Iowa caucuses.

What do you think about ethanol?

And why are we not looking at natural gas for fuel as it burns clean and we have the reserves?

Google what T. Boone Pickens says about natural gas, a person who knows. Also the ratio on a BTU basis for natural gas vs. oil is around 6. Therefore on a BTU basis natural gas is like $50 a barrel oil. So its cheaper, burns cleaner and we can source it in the USA. See www.oilandgasinvest.com for the graphs of natural gas and oil.

Peak Oil and the next Bubble

JAB — Mon, 11 Feb 2008 20:46:00 -0600

RROYO GRANDE, Calif. (MarketWatch) -- Hollywood tag lines fit Exxon Mobil's $40 billion profit as well as the movies: "There will be Blood. There will be Greed. There will be Vengeance."

Our "war of civilizations" is not of theologies but a primal battle to control basic resources essential to survival. Yes, there is blood ... and oil ... and greed ... and vengeance ... and wars for survival.

www.marketwatch.com/news/story/you-vote-megabubble-next-bring/story.aspx?guid=%7BFC99D4EE%2D3C21%2D45F7%2DBD77%2D9F6513CCC244%7D&siteid=yahoomy

I don't believe in bubble theory but do believe in peak oil theory. I believe the above article nails the token investments being made in alternative energy. My sources tell me that biodiesel costs around $2.80 per gallon on average. That's before taxes and profits. This being the case, then investments in biodiesel are higher risk than cheaper oil and gas alternatives. www.oilandgasinvest.com

Natural Gas Prices versus Oil Prices

JAB — Sun, 03 Feb 2008 19:11:00 -0600

Historically, oil prices have run at something around 6 to 1 versus natural gas prices, with the correlation reflecting their BTU equivalent. So if oil prices were $30 then natural gas would be $5. However in the past year there has been an increasing divergence of oil prices compared to natural gas prices. The current ratio is 11 to 1. So is oil over priced? Or, is natural gas under priced?

See the graphs at www.oilandgasinvest.com

Redneck Pool Party

JAB — Thu, 31 Jan 2008 22:20:00 -0600

Blow up pool - $125. Electric mini grill - $79. Beer - $65. Flip flops - $3. Being able to grill while never leaving the comfort of your blow up pool - Priceless !
Yes, that is a power cord being floated on the flip flops.

Fed may cut interest rates again. But will it help homeowners?

JAB — Wed, 30 Jan 2008 08:38:00 -0600

WASHINGTON - The Federal Reserve is likely to follow its bold action last week to battle an economic downturn with further interest rate reductions, although analysts are split on just what size the future cuts will be. That would mean the Fed will cut its federal funds rate, the interest that banks charge each other, by a quarter point at the conclusion of Wednesday's meeting. It would be the fifth rate cut since last September. Last week, the Fed announced a surprise three-quarter-point cut which drove the funds rate down to 3.5 percent. It was the largest reduction in this rate in more than two decades and the first change in the funds rate between meetings since the immediate aftermath of the September 2001 terrorist attacks. [|http://news.yahoo.com/s/ap/20080130/ap_on_bi_ge/fed_interest_rates_28|en]

In my humble opinion, lower interest rates may help but not solve the problem. I believe the problem is the lack of lending. The banks are saying that they will not lend until prices stabilize. Prices will not stabilize until there is lending. Its a circular argument. It reminds me of the S&L crisis in the 80s. It took a few years for things to totally unwind after the excessive lending practices of the S&Ls in the early to mid 80s. Based on my discussions with mortgage brokers, nonconfirming loans (e.g. above $417,000) are not being made at this time. While 'no docs' are out (good. they never should existed imho), but 'stated income' mortgages for confirming loans are still be written. Note: many small business owners have to use stated income to buy a home. So there are virtually no mortgages being made for expensive home markets like on the East and West Coast. The folks with the ARMS were talked into getting ARMS in order to save money in the short term. The pitch was to refinance the ARMS once interest rates start increasing. Lower interest rates will certainly help them make their monthly payments, but will not produce buyers to get out of their situation if they overbought. Congress is trying to raise the confirming loans amounts up to around $700k I believe which would also help a great deal of people. I hope it passes. The sad part of this is that at least some homeowners in California and elsewhere were tapping home equity loans to buy properties elsewhere or spend the money. I am always surprised to see advertisements at the local bank trying to make home equity loans to consumers in order to 'spend' not 'invest' the money. One bank has a sign saying something like "You deserve that vacation. Take out a home equity loan." I find the practice shocking, as home equity is one of the primary sources of retirement for many people. And pitches like that are preying are those who lack understanding and/or discipline in their financial affairs. What ever happened to good old savings and then spending? And aren't banks supposed to encourage prudent financial practices, or at least not encourage bad financial practices?....Just some observations. www.oilandgasinvest.com

Oil Companies and Broker/Dealers

JAB — Thu, 24 Jan 2008 22:21:00 -0600

Please provide any private oil companies or broker/dealers you know of.

[NOTE: Any investments listed on this blog are not endorsed or related to in any way to OilandGasInvest.com LLC. In other words, do your due diligence because we have not, and we accept no responsibility for investment decisions. Please read disclaimers on Home page at www.oilandgasinvest.com for risks of investing in oil and gas, including the fact that may lose all or a portion of your investment and investments may be very illiquid and have a high amount of expense related to them. This is for informational and educational purposes only. Persons considering these investments must be accredited, sophisticated, and qualified to make them.]

'The Oil Factor' by Stephen and Donna Leeb

JAB — Thu, 17 Jan 2008 17:35:00 -0600

If you haven't read Stephen and Donna Leeb's book, The Oil Factor, I highly recommend it. I only wished I would have read it earlier. Published in 2004, it describes among other things increased commodity/energy prices and inflation as well as the possible impact on various asset classes. What do you think about The Oil Factor? Did this book accurately predict where we are today? Where we are heading? Provide your comments and views.

Whatever Happened to Wind Energy?

JAB — Wed, 16 Jan 2008 15:03:00 -0600

Michael Schirber Special to LiveScience LiveScience.com Tue Jan 15, 5:31 PM ET Editor's Note: This article is part of an occasional LiveScience series about ideas to ease humanity's impact on the environment

http://news.yahoo.com/s/livescience/whateverhappenedtowindenergy;_ylt=Ao5MY4WwIg6._3vLdOSOe0gDW7oF

In Austin, a city with a lot of very environmentally consience people, a company was trying to build a wind farm in the hill country to provide energy to the city. One would have thought this would have been well received. Believe or not, certain environmentalists protested the idea, saying it was ugly to look at and destroyed the environment. You would think they would understand our need to reduce our dependency on foreign oil.

http://news.yahoo.com/s/livescience/whateverhappenedtowindenergy;_ylt=Ao5MY4WwIg6._3vLdOSOe0gDW7oF

Consumers strained by rising prices

JAB — Wed, 16 Jan 2008 14:00:00 -0600

NEW YORK (MarketWatch) -- U.S. stocks on Wednesday edged off earlier declines, with badly beaten financial and consumer stocks helping pave the way higher amid easing commodity prices and less-disappointing-than-anticipated results from two large banks.

http://www.marketwatch.com/news/story/us-stocks-pare-some-losses/story.aspx?guid={CA97408E-1D9D-40FB-8644-10E2B48EFB9B}&siteid=yahoomy

Crude drops below $90 per barrel

JAB — Wed, 16 Jan 2008 13:40:00 -0600

U.S. stocks turn mixed as Intel outlook disappoints Dow turns positive as commodity prices ease; crude falls below $90 a barrel By Kate Gibson, MarketWatch Last update: 12:29 p.m. EST Jan. 16, 2008 NEW YORK (MarketWatch) -- U.S. stocks on Wednesday edged off earlier declines, with badly beaten financial and consumer stocks helping pave the way higher amid

Oil eases to $94

JAB — Tue, 15 Jan 2008 08:26:00 -0600

Reuters reported that oil prices have eased to around $94 a barrel on Tuesday due to concerns of a recession in the USA.

http://news.yahoo.com/s/nm/20080115/bs_nm/markets_oil_dc;_ylt=Am0cgmvlmafgxj.Jscq2FDW573QA

Tube Blow Out

JAB — Sun, 13 Jan 2008 21:07:00 -0600

Oops. Tube blown out in Canada. This picture was making the rounds in certain oil and gas circles.

Oil extends decline on U.S. recession fears

JAB — Sun, 13 Jan 2008 20:19:00 -0600

SYDNEY (Reuters) - Oil fell on Monday, extending the past three sessions' decline, as the growing threat of a U.S. economic downturn outweighed supply worries in Iran and Nigeria. ADVERTISEMENT U.S. light crude for February delivery fell 23 cents to $92.46 a barrel by 0106 GMT. U.S oil settled down $1.02 at $92.69 a barrel on Friday, dragged down by fears of a potential U.S. economic recession. "There was some bullish news out of Iran and Nigeria that could have pushed up oil prices, but Asian markets are focusing on the health of U.S. economy for now," said Gerard Burg, a resource analyst at National Bank of Australia (NAB) in Melbourne. Oil drops to $92.46 in Sydney based on recession fears.

http://news.yahoo.com/s/nm/20080114/bs_nm/markets_oil_dc_1

Saudi not set to sell more for Feb despite $100 oil

JAB — Fri, 11 Jan 2008 10:40:00 -0600

Reuters
Thursday January 10 2008

By Maryelle Demongeot

SINGAPORE, Jan 10 (Reuters) - Saudi Arabia is unlikely to offer extra crude for February to Asian buyers, even after oil hit $100 last week, as most refiners have little need and ability to process additional heavy sour crude, refining sources said.

The kingdom raised term exports to Asia by a tenth for November to full contracted volumes after it convinced other OPEC members to boost daily output by 500,000 barrels from Nov.1, in response to a jump in prices past $80 a barrel for the first time in September.

[http://www.guardian.co.uk/feedarticle?id=7213649]

Gold tops $900 on rate-cut speculation

JAB — Fri, 11 Jan 2008 10:37:00 -0600

Appears to be a flight to commodities. Could this be from expected inflation and devaluation of the US Dollar if the Fed lowers interest rates? Provide your views.
http://www.marketwatch.com/news/story/gold-tops-900-rate-cut-speculation/story.aspx?guid={EDB4C4A5-AECB-4D75-A84C-C040E69826BC}&siteid=yahoomy

Gunmen attack ships near Nigerian oil complex

JAB — Thu, 10 Jan 2008 15:53:00 -0600

http://africa.reuters.com/business/news/usnBAN024622.html

India car manufacturer introduces a car which will sell for $2,500

JAB — Thu, 10 Jan 2008 07:44:00 -0600

Based on the article, this is going to increase the number of cars in India significantly. This car is 50% price of the next cheapest.

http://news.yahoo.com/s/ap/20080110/ap_on_bi_ge/india_ultracheap_car;_ylt=Av7PKFig94__sP9tzsy_Ce4DW7oF

[|http://news.yahoo.com/s/ap/20080110/ap_on_bi_ge/india_ultracheap_car;_ylt=Av7PKFig94__sP9tzsy_Ce4DW7oF|en]

Toyota's sales in China rise 62% last year

JAB — Thu, 10 Jan 2008 07:41:00 -0600

Wow, that's impressive increase in cars. The full link for the article is below. Cut and paste into your web browser.

http://www.marketwatch.com/news/story/toyotas-sales-china-rise-62/story.aspx?guid={71AE0066-FD44-4121-8F33-CBF4400EEA50}&siteid=yahoomy

[|http://www.marketwatch.com/news/story/toyotas-sales-china-rise-62/story.aspx?guid={71AE0066-FD44-4121-8F33-CBF4400EEA50}&siteid=yahoomy|en]

Blow out in Texas

JAB — Wed, 09 Jan 2008 08:07:00 -0600

This picture was making the rounds in the oil community. Received this picture from a friend who is in charge of operations for large independent in Texas...wasn't one of his wells.

World dependency on OPEC to grow in '08

JAB — Wed, 09 Jan 2008 07:37:00 -0600

Interesting article, particularly as OPEC has indicated that it sees no change in production levels.

WASHINGTON, Jan 8 (Reuters) - The world will be even more dependent on OPEC this year for its oil supply as production sags from key non-cartel members Mexico and Norway, the U.S. Energy Information Administration said on Tuesday.

"World oil demand will continue to grow faster than oil supply outside of the Organization of the Petroleum Exporting Countries in 2008, leaving OPEC and inventories to offset the upward pressure on prices," the EIA said in its monthly outlook. OPEC supplies about a third of global oil demand.

The EIA forecast tight oil supplies in 2008, with U.S. crude oil prices averaging $87.21 a barrel over the year, after prices briefly eclipsed the key $100 a barrel mark last week....

Link to full article here.

http://uk.reuters.com/article/oilRpt/idUKN0850109020080108