Independent capital for independent producers.

Producer Articles

The News is So Bad!

I have received a number of calls recently with a common theme; “The News is So Bad!” This statement is usually followed by: “I read that the price of oil/gas will never recover”; “The drilling industry is collapsing”; “I read that the collapse of the oil/gas industry may go on for decades”; or “How...

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Good News – Bad News

The US Energy Information Agency (“EIA”) recently announced that production from wells drilled since the start of 2014 made up 48 percent of total US crude oil production in 2015. With the increased use of hydraulically fractured horizontal wells, new production as a percentage of total US production has more than doubled from 22%in...

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“Déjà Vu All Over Again” – The Market for Oil and Gas Assets

What a difference a year makes! At this time last year, oil was around $60 per barrel, and we thought we had taken a beating. When oil fell from $85 to $60 per barrel, the present value of the future production fell in half. Little did we know that, in 2015, we would see...

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What Happened in 2015?

As the oil industry stumbles into 2016, everyone is asking the same questions: Why did oil and natural gas prices fall so far and so fast in 2015? Did anyone see the collapse coming? Did anyone forecast it? Were OPEC or non-OPEC countries or groups to blame? Were individuals? How long will current conditions...

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Beyond the Storm, Bright Horizons

Over the last five years, oil production in the US increased by over 4.5 million barrels of oil per day (“bopd”) to almost 10 million bopd.  The US now rivals Saudi Arabia for the position of largest oil producer in the world.  This 4.5 million bopd increase is about a 5% increase in world...

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Riding the Cycles

No one needs to inform west Texas citizens that the oil and natural gas industry is currently in a slump. All one has to do is drive from Midland to Odessa and count the number of drilling rigs standing idle in storage yards, or pick up a copy of Midland’s The Daily Observer to...

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Change in The Oil Industry and the Impact on Five States

The Oil Market Over the last five years, oil production in the US increased by over 4.5 million barrels of oil per day (“bopd”) to almost 10 million bopd. The US now rivals Saudi Arabia for the position of largest oil producer in the world.  This 4.5 million bopd increase is about a 5%...

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How Do We Know?

Our most frequently asked question the last several months can be summarized as “How Do We Know?” Some specific questions are, “How do we know: When oil prices have bottomed? When it is time to buy? When the banks will force their non-compliant or insolvent borrowers to sell? When it is time to “back...

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30-Year Anniversary Events

Five States is celebrating our 30th year in business! We gratefully acknowledge the confidence and support of the many financial advisors, investors, business associates, employees, and friends who have been a part of our success and growth through the years. Many of the company’s current activities are “business as usual”: reviewing investment submittals, analyzing...

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Capital Rationing

Capital Rationing is a reflection of limited capital in an industry segment. Following the collapse in crude oil prices, capital in the oil and gas sector is now more disciplined, providing a greatly improved investment environment for Five States.

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The Oil Glut

Global oil prices are now near five-year lows. US producers are feeling the pain; they are not alone. Low oil and natural gas prices are causing companies and governments throughout the world to reexamine their budgets, rethink their priorities and, in some cases, make major policy decisions based on the possibility that significantly higher...

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2015 Energy Issues Outlook

Each year, JP Morgan writes a “deep dive” piece on energy. The report is a well-researched analysis that covers several specific topics. We find the report to be informative and useful as a basis for understanding current issues and forming opinions pertinent to our industry. This year’s topics include the history of energy development...

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Crude Oil: A Market Perspective

The decline in crude oil prices over the last six months has been dramatic. Since early summer, the spot price for crude oil traded on the New York Mercantile Exchange (“NYMEX”) has dropped from the $90 - $100 per barrel range, where it has been trading for the last several years, to about $70...

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Oil Fundamentals: Supply & Demand

As with all commodities, the price of oil is determined by supply and demand. People often think that oil is “special” because we are “running out,” and do not understand how prices can fall. But like all commodities, the daily price of oil is determined by daily demand and deliverable supply. When supply is...

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