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(21-01-2014, 06:55 PM)LionFlyer Wrote: I think it boils down to what TS mean as "investing directly" in oil and gas.
I met someone (a Singaporean) who is "directly" vested in oil and gas down in Australia as it owning the land titles to several claims. But of course, if you put down money and you just own so called "rights", you really don't own anything. (correct me if I am wrong)
There are many investments that claim to be giving rights to the investments indeed. But there is no clear way to identifying the business itself, let alone looking at the financial status. While they claim to be audited, audited reports are not available usually. I recommend staying clear of these investments.
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Similar alternative investments attract little interest in VB. Our members are likely more risk averse, love simple investment scheme, and look for certainties, than "stories".
It happened for the previous Brazil's property alternative investment proposal.
“夏则资皮，冬则资纱，旱则资船，水则资车” - 范蠡
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I am not sure if you guys are aware, Charlie Munger had an oil partnership when he was young. I believe I read that he still has it till this date.
It is alternative investments because it sounds fanciful to us where we do not have a history of oil.
Investment in oil wells went back to 1895 in the US.
The issue here is how well you know the wells, the infrastructure to transport the oil, the oil industry and the price you pay for.
Many data already showed some rapid declines after 1st 2 years of drilling, especially hydraulic fracturing. You have to understand it costs about 3x to 10x more depending on where you drill and the adjacent drilling. Also, oil well data is subject to certain audit guidelines by the US petroleum engineers. Then you have to worry about whether there is a refiner nearby in which you can sell to and whether there are railroads/tank trucks/roads available in that in which you drill.
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they say there is oil in abandoned offshore oil rigs usually around 20-30% of the oil remaining in the well but just too deep and too uneconomical to drill it up so they leave it abandoned until technology advances that will make it economical to drill again. There are around 27,000 abandoned oil rigs in the gulf of mexico and nobody is rushing to buy them.
To me if it's really good well they will keep it for themselves why would they want to give it to the public unless the oil remaining in the well is so low or so deep it uneconomical to operate like abandoned oil wells.
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(13-04-2014, 03:49 AM)sgd Wrote: they say there is oil in abandoned offshore oil rigs usually around 20-30% of the oil remaining in the well but just too deep and too uneconomical to drill it up so they leave it abandoned until technology advances that will make it economical to drill again. There are around 27,000 abandoned oil rigs in the gulf of mexico and nobody is rushing to buy them.
To me if it's really good well they will keep it for themselves why would they want to give it to the public unless the oil remaining in the well is so low or so deep it uneconomical to operate like abandoned oil wells.
I cannot help but smile at comments like that.
There is this concept of OOIP (original oil in place) or STOOIP or STOIIP. That represents the volume of oil in the source rocks. Depending on the nature/formation of the rocks, including porosity, permeability, water, etc., one might be able to produce 20% - 40% of this OOIP.
Enhanced oil recovery (EOR) techniques, e.g. water flood, polymer flood or CO2 flooding might be deployed to increase recovery. Not all oil fields response similarly to EOR. Application of EOR might raise total recovery to 50% - 70%, i.e. a significant amount of oil is still trapped within.
Another point is that it is oil wells or oil platforms that are abandoned (Incidentally, there are rules for plugging and abandonment). Drilling rigs always move on to the next target or prospect.
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In investment, i always have a view of "X" instead of "Y". There's need to have some level of motivation and accountability. Handing over money to an entity that you have no clear recourse when difficulty arise and which the motivation itself CAN BE just your money, is playing with luck biased against you significantly.
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13-04-2014, 10:56 PM
(This post was last modified: 13-04-2014, 10:57 PM by fat al.)
(13-04-2014, 10:42 AM)corydorus Wrote: In investment, i always have a view of "X" instead of "Y". There's need to have some level of motivation and accountability. Handing over money to an entity that you have no clear recourse when difficulty arise and which the motivation itself CAN BE just your money, is playing with luck biased against you significantly. Thank you for this.
One can never be too careful. I have seen one case where monies were handed over because the investment "sponsor" brought in a reputable law firm. The "sponsor" spent some time in jail for fraud ultimately. The law firm lost some billable hours in the criminal court but was absolved of all responsibility; they were not paid to perform financial or legal due diligence for investors, only to give a talk on "investment101" and draft the contract.
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(22-01-2014, 10:21 AM)CityFarmer Wrote: Similar alternative investments attract little interest in VB. Our members are likely more risk averse, love simple investment scheme, and look for certainties, than "stories".
It happened for the previous Brazil's property alternative investment proposal.
CityFarmer,
Looks like there is some update on this. Am not suggesting that there is anything wrong about this investment (don't wanna get this forum into trouble with legal threats). As what Corydorus pointed out, it is not the fundamentals (whether oil wells or real estate) that is of concern but the complication of dealing with the counterparty if anything goes wrong.
http://www.propertyguru.com.sg/property-...to-surface
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(13-04-2014, 11:07 PM)fat al Wrote: (22-01-2014, 10:21 AM)CityFarmer Wrote: Similar alternative investments attract little interest in VB. Our members are likely more risk averse, love simple investment scheme, and look for certainties, than "stories".
It happened for the previous Brazil's property alternative investment proposal.
CityFarmer,
Looks like there is some update on this. Am not suggesting that there is anything wrong about this investment (don't wanna get this forum into trouble with legal threats). As what Corydorus pointed out, it is not the fundamentals (whether oil wells or real estate) that is of concern but the complication of dealing with the counterparty if anything goes wrong.
http://www.propertyguru.com.sg/property-...to-surface
The investment risk itself is so high that the return hardly justifies the investment.
If the investors had read more widely, they probably would have be more cautious.
Information are readily available in the net to make a sensible deduction.
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(14-04-2014, 06:45 AM)yeokiwi Wrote: The investment risk itself is so high that the return hardly justifies the investment.
If the investors had read more widely, they probably would have be more cautious.
Information are readily available in the net to make a sensible deduction.
BT Article - Still Not Paid After 5 Months
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