A thought for anyone, who uses large amounts of fuel

A thought for ship owners, trucking companies,
Airlines, factory owners and anyone else
who uses large amounts of fuel.

If you need to think in terms of many years into the future:

Why spend money on fuel if you can make money on fuel?

Why spend $4.00 for a gallon of fuel, if you can pay $1?

If you buy oil wells in America, that are producing oil from the ground, you can sell that oil and use that income to compensate your fuel costs at home.

If an oil well is producing $1,000,000 of oil each year, you can buy that oil well for $5,000,000. In five years, you would have your money back and the oil well will continue to provide $1,000,000 a year to you for many years.

This is not an unrealistic idea. Japan Airlines came to us and asked us about exactly that, so that they could secure a cheap fuel source for their jets.

Some years ago, one of the large airline companies in America, Southwest Airlines, bought futures contracts in oil, giving them a guaranteed price of $75 a barrel. When the price of oil rose to $150 a barrel, Southwest Airlines was paying $75 for it and then selling it for $150. This one maneuver is the reason why Southwest Airlines was the only major airline in America operating at a profit at that time.

What if the price of oil drops, as it does from time to time?

You will still be selling oil that you bought for $20 a barrel. So, oil can drop from the current price of $106 per barrel, down to $30 and you still earn a profit. Or, just turn the wells off and wait. Historically, when oil prices go down, they do not stay down for very long. There is a reason for that.

If, for example, you buy a producing oil property, this is a general description of what will occur:

Cost of producing oil property: $5,000,000

Price of oil: $106 per barrel

Barrels of oil per day: 60

20 years X 60 Barrels per day = 432,000 barrels total

$5,000,000 divided by 432,000 Barrels = $11.57 per barrel.

Assume maintenance, down time, other interruptions and conclude that $20 a barrel is the price per barrel that you will be paying.

And consider: The major oil companies such as Exxon did not make their fortunes by taking a chance on hopefully “finding” oil by drilling for it.

They made their money by buying producing oil wells that small independent companies found by taking the high risks of drilling for that oil.

When prices are high, major oil companies don’t buy very many small company’s oil wells. They wait.

When the price is very low, the major oil companies move in like hungry wolves and are out knocking on doors trying to buy oil wells from the oil companies who did not plan on low prices and are going bankrupt.

This is a system developed by John D. Rockefeller in the late 1800s and continues to this day. Because………….it works.

We respectfully suggest that you consider following the major oil companies’ lead and do what they have done to make incredible fortunes: Buy producing oil wells.

On page 48 of Exxon’s 2009 Annual Report, they state that it cost them $1.54 for each barrel of oil that they acquire. In 2008, the cost was $1.32 and in 2007 it cost 97 cents per barrel. (and they have been selling it for $35 to $106 per barrel)

“Population and economic growth – particularly in developing countries – are expected
to push global demand for energy higher by almost 35 percent by 2030 compared to 2005.”

Source: Exxon 2009 Annual Report.
http://thomson.mobular.net/thomson/7/3095/4222/document_0/XOM_SAR09.pdf

We can not acquire oil in ground for $1.54 per barrel. We don’t operate in Qatar, Saudi Arabia, Indonesia, etc. Nor do we deal with 3rd World dictators.

BUT……………we can acquire it for $20 per barrel right here in America. No uprisings. No revolutions. No rebels. No air attacks. No military to employ.

Exxon’s annual Report does not reflect the true price to acquire their oil. Exxon does not pay for the Tomahawk missiles, jet fighters, aircraft carriers, battleships and troops on the ground.

During the Gulf War of 1990, adding up the military costs, the total costs to move oil through the Strait of Hormuz to market, was over $150 per barrel.

And that is EXACTLY what oil is worth.

That price has been tested and the World can afford it.