The Undiscovered Delaware Basin Gem

Every oil producer wants an oil play with Middle East type economics.

What they want even more is…an oil play with Middle East type economics located in the Lower 48.

Just imagine how much land in such a play would be worth……an oil play that can generate really attractive returns in the new low oil price world.

You don’t have to imagine it.  There is a massive land rush taking place in such a play right now where land prices are off the charts.

I have stumbled onto a tiny company that holds acreage right in the core of this play.  Acreage that nobody knows that the company has.

I call the company my Delaware Basin Gem and it is surrounded by some of the biggest producers in the region who have been drilling outstanding wells.

The Delaware Basin – The Permian’s Next Act

In the fall of 2014 Saudi Arabia abandoned a decades old strategy of supporting oil prices and instead jacked up production into an already oversupplied market.  The Saudis had figured out what was coming.   They knew their control of the global oil market had come to an end.

The Bakken ushered in the era of horizontal oil production.  The Eagle Ford followed shortly thereafter.

Neither of those can hold a candle to the Permian Basin.  It’s a play where oil producers can not only breakeven, but make great money with $45 oil and grow production.  It was the Permian that made the Saudis realize that their era of oil dominance was ending.

The Permian’s first horizontal act was the Midland Basin.  The land rush there took place a couple of years ago.  The Midland gave us a taste of what the Permian was capable of.  In 2016 the Permian’s second horizontal act has been taking place in the Delaware Basin.

The land rush here has been on in full force.

The trigger point was a series of incredible wells drilled by OGIB portfolio stock Resolute Energy (REN:NYSE).   Resolute’s share price tells you exactly how good those wells were.

 With those drilling results out and other operators doing similar things the scramble for Delaware Basin acreage was on.  Nobody knows if oil is ever going back to $80 per barrel…….the Delaware Basin is a rare place to make money if it doesnn’t.

Locking down a play that allows for profitable drilling at $45 oil could mean the difference between life and death for a producer.  Companies need to get into this play.

As a result of the rush for land prices in the Delaware Basin have reached more than $30,000 per acre.  An astounding amount considering that we are at the bottom of a generational oil collapse.

And the well results just keep getting better…

My Delaware Basin Gem acquired its Delaware Basin acreage long before the land rush began.  Better yet, it managed to do it by acquiring an overleveraged company that was on the verge of insolvency.

Needless to say…..my Delaware Basin Gem got an incredible deal paying next to nothing for land that is now worth $30,000 per acre–and those prices are moving up.

The First Well Lets The Cat Out Of The Bag

So far this little company has been playing its cards close to the vest.  It has been waiting patiently as larger operators drill up land around them…..de-risking the play and perfecting drilling techniques.

Because it hasn’t drilled any wells, the company hasn’t popped up on the radar screens of investors studying the Delaware Basin.  That is why it is so incredibly mispriced.

When that first well is drilled my Delaware Basin Gem is going to get in front of all kinds of investors.

And the market is going to start to value its acreage more appropriately.

That means the clock is ticking on this opportunity.  To get a look at this Delaware Basin Gem before the rest of the investing world does just click HERE.

-Keith