Keith Kohl has released a presentation titled “The Trillion Dollar Drill,” which centers around a company he claims has come up with a “revolutionary method” of drilling shale oil.
According to Kohl, the company has come up with a “groundbreaking oil extraction method” (which he refers to as the “Horseshoe Well”) that could double or triple oil output from the same piece of land, unlocking “immense wealth” in the process.
The basic premise behind this Keith Kohl presentation is that the company he’s recommending has come up with a special way to drill shale oil (via fracking) that can boost production and reduce costs, thus increasing the company’s profits.
The “innovation” he’s referring to centers around a so-called “horseshoe well” where the company drills u-shaped patterns rather than straight lines.
Here’s a snippet from the teaser where he explains it:
“This standard approach only spans about a 1-mile area, which limits how much oil you can extract from any specific piece of land.
“Enter the ‘Horseshoe Well’…
“It drills straight down, makes a 180-degree turn, and then drills back toward its starting point.
“This engineering marvel allows the company to tap into an additional mile’s worth of oil shale WITHOUT having to drill multiple wells…
“Essentially allowing you to double your oil output or more from the same piece of land!”
[…]
“By extracting more oil efficiently, the ‘Horseshoe Well’ can BOOST American oil production, turning the global energy industry upside down in favor of America as it chugs toward world oil dominance.”
Source: https://secure2.angelpub.com/o/web/654915
So, long story short… Kohl claims that this new method has the potential to double shale oil production from any one site while saving the company millions of dollars.
“Its innovative design unlocks the potential to DOUBLE the oil yield from a single site — no additional wells needed!
“And the cherry on top?
“It slashes operating costs by millions of dollars, supercharging the bottom line and igniting explosive profits.”
Kohl also states that this approach could reduce the impact drilling has on the environment since it requires fewer wells to be drilled.
And he argues that this new technology is needed because shale producers are reporting diminished yields on their most productive wells using existing techniques, even though there’s an “ocean of oil” in the U.S.
This is something I’ve heard numerous analysts discuss in the past year… that shale oil production is peaking, which, among other things, could lead to higher oil prices in the years ahead. And, of course, higher oil prices are naturally good for oil stocks.
Does that mean the company Kohl’s pitching is a good bet?
Not necessarily, no.
I was curious to know what company he was referring to, though. And based on the clues, I think I know what stock he’s teasing. So let me show you what I found.
The first main clue Keith Kohl shared is that the company he’s teasing is a Texas-based oil company with 150,000 acres in the Permian Basin.
“This small Texas firm is an oil giant in the making.
“This firm owns a whopping 150,000 acres in the heart of America’s most prized oil field — the Permian Basin.”
He then said that the company recently reached the milestone of producing over 130,000 barrels of oil and gas per day, and shared a quote from the company’s CEO related to this.
“In fact, commenting on the astounding second-quarter results, the CEO said the company ‘had record production’ of over 130,000 barrels of oil and gas produced per day.
“And he’s anticipating a stunning 40% growth in production for the year!”
What else did he say?
The only other tangible clue he shared was about how the company’s CEO built his first oil company for $270k, which he later sold for $388 million.
“The CEO is a rock star in the oil and gas business.
“He built his first oil company from scratch in Texas with just $270,000, and he later sold it for a stunning $388 million.”
So with that, I looked into the most specific clue about the “record production” of 130,000 barrels/day… and that led me to this article on gurufocus.com, which centers around a company called Matador Resources Company (MTDR).
And I believe this company is a match.
Why? Well, not only does the above article show that the quote Keith Kohl shared from the company CEO lines up with Matador Resources… but the company:
The only way to find out for sure if Matador is the company Keith Kohl is teasing would be to join his paid newsletter, Energy Investor, for $99.
Because doing so gives you access to a research report he’s put together called “The ‘Horseshoe Well’: The Breakthrough Set to Revolutionize the $4.3 Trillion Oil Market.”
I haven’t read that report myself, so I can’t say with certainty that my guess is right. But I’m confident I am right on this one based on the clues he shared. So if you agree with my research, at least you don’t have to fork out $99 to get the name of the company.
Ok, but is Kohl’s idea a good one?
I won’t speculate on whether Matador is a good investment idea or not since I’m not a finance professional, but I did find an interesting article on Seeking Alpha that you may find helpful if you want to further your research without joining Kohl’s newsletter.
As always, I would recommend taking presentations like the “Trillion Dollar Drill” with a pinch of salt because they are almost always overhyped. And if there’s one thing I’ve learned, it’s that there is no such thing as a sure thing in the world of investing.
So, while Keith Kohl’s idea might be a good one, it could just as easily not be. That’s why it’s important to do your own research and never invest more than you can afford to lose.
Anyways, that’s my take.
I hope you found this article helpful and appreciate you stopping by!
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