02/13 2016

$100,000,000 Petro Fund

Kellen partners with overseas investors, and U.S. geologists to determine cash flow from undervalued, distressed or abandoned wells, property and leases.  Partnering with consultants, specialists, major oil firms, and international providers.

If you had followed Motley Fool’s advice in the 90’s a 10,000 dollar investment in MSFT would be worth hundreds of millions, a 1,000 investment in Apple about ten million.

With oil plunging to record lows, there has never been a better time to enter the market.   http://www.fool.com/investing/general/2016/01/16/top-oil-stocks-to-buy-in-2016.aspx  At the lowest prices we’ve seen in three decades, it doesn’t take a magic wand to find investments that produce high, and sustained profits moving forward.  Nor do we disagree with Motley Fool.   Follow the money.  NOW is the time to enter into Oil Investments, not necessarily for stocks in major Large Cap companies.  With large floats, they do not move as much for our tastes.  An Exxon or Conoco will never have the nimbleness of a private investment stock.  And smaller funds use laser like precision to pinpoint the most profits, without the huge bureaucracy that a Shell Oil has.

 

Kellen is banking on something MUCH MORE solid than wishful thinking.  While many investors are just hoping for bounce of $5 upward in oil, they are missing the point entirely.  You see: Buying Oil long IS WISHFUL THINKING!  

Instead, let’s look at the overall trend in Oil Prices over the last 5 years, shall we? And then we have to be realistic, and ask ourselves:   HOW LOW WILL OIL GO?

Here’s the 5 Year Chart (below). Oil was strong in 2011, 2012 right through 2014.  Then it dropped.  What’s caused the downturn, we all know by now:  Saudi Arabia is hoping to drive the shale producers out of business.

 

Cost of Crude 5 Year Chart

Thus, it is instrumental to determine how much it costs to produce a barrel of oil, what is the breakeven price, and how low does oil have to drop to put producers out of business?

The Rystad Chart (below) shows us that at $30 dollar oil for instance, producers 13 through 20 (China through the United Kingdom) lose money.

Cost to Produce Oil

And the chart above also explains EXACTLY WHERE OIL IS HEADED!!  Anyone who thinks the Saudis are done dropping oil prices, is being naive.  If your plans are to buy oil stocks in this market, then you are more naive than most!  The top 5 countries on the above list can afford to let oil drop to $20 or even $15 dollars, even for a few months, or weeks, for the sole purpose of putting competitors out of business.

And it is the magic $10 per oil mark that we see as the real bottom.  Will Oil ever get that low? Probably not.  Saudi Arabia may be ruthless, but the Kingdom is not stupid.  It can ill afford to have peasants in the streets, and to close down it’s air conditioning and water treatment plants.   But $15 dollar oil is a real possibility and we have planned our profits for exactly that!

All of our acquisitions and assets are based on $10 oil!  That’s right.  Oil can drop even further, and our business model works.  To site one example.  Our consultants and partners have a well that will produce 4,000 barrels per day for ten years on their first tier. Under the first tier are two more depths, meaning the site will generate 4,000 barrels for twenty five to thirty years.   The Investment is 20 million.  At $10 oil, the revenue generated is $17,250,000 per year.  Twenty year revenues therefore are $340,000,000 dollars.  At $15 Dollar Oil = half a billion in revenue.  At twenty dollar oil, the revenue is $650,000,000.

Now imagine acquiring similar wells,  production facilities and leases that are abandoned, condemned or that we lease with little or no cash outlay?

You begin to see the tremendous upside to Oil acquisition funds, and those focused specifically on low or no overhead properties.

The fund acquires assets for 5% of value, and with long term value of 500 to 1,000 percent.  Some leases are simply in Chapter 11, or Kellen legal teams determine that they are condemned.  With environmental capping laws, some of the past owners find it more difficult to close down wells ~ closing a well, costs money, and so they simply walk away.  These assets are ripe for the picking, and there are no competitive bidders.   The Petro Fund  acquires rights to U.S. and  overseas producing properties with little or no cash investment.  Our staff geologists are familiar with the properties often before they are abandoned.   Kellen;s Petro Fund will be one of the greatest investments anyone can ever make.  Shares will be valued at $50 a share.  Minimum investment  is $10,000. or  200 shares.

 

Call Lon Dunn  Or Write:  Lon@KellenCapital.com

Kellen Capital, Inc

703-675-0593

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