[Posted on May 2nd, 2013 by Michael L. F. Slavin]
Houston-based U.S. Emerald Energy offers investors a unique opportunity for investing in oil and gas exploration. Since 1992, U.S. Emerald Energy has emerged as an expert in the further exploitation of already known oil reserves. U.S. Emerald Energy’s management team is run by a West Point graduate, and the enterprise is an A+ BBB member.
U.S. Emerald Energy has developed contacts throughout the oil and gas industry for over 20 years. As a result, the organization enjoys a steady flow of prospects for it to consider when investing in oil and gas.
U.S. Emerald Energy has developed a precise methodology to improve its success rate. It utilizes these critical steps to maximize the opportunity for success.
Cherry-picking The Best
U.S. Emerald Energy only considers projects that are ready to drill. Only when all of the land leasing, initial research, and seismic analysis are all complete is U.S. Emerald Energy willing to consider a well-drilling opportunity. In each selection cycle U.S. Emerald Energy is approached to consider anywhere from 50 to 100 oil and gas projects annually.
From those, it selects only about four or five that it subjects to its own exhaustive analysis. U.S. Emerald Energy contracts with independent geologists that will engage in a comprehensive review of the few remaining prospects. Typically, this step eliminates another handful of deals.
U.S. Emerald Energy’s due diligence results in the selection of just one project to proceed with. This methodology has resulted in U.S. Emerald Energy establishing an excellent track record over two decades.
Focus On Multiple Pay Zones
A well drilled in an area with just one potential pay zone is in an "all or nothing" proposition. U.S. Emerald Energy focuses on wells that typically offer a number of possible pay zones. As a result, a typical U.S. Emerald Energy well will often have three to five potential pay zones, plus others that may "hit pay" serendipitously.
Drilling Safer Developmental Wells Exclusively
"Wildcat" wells are those that are drilled in areas that lack any surrounding production. U.S. Emerald Energy does not engage in wildcat drilling. Rather, it only drills developmental wells in areas already known to have produced oil or gas.
The latest 3D seismic technology is then brought to each project as necessary. Numerous fields were drilled before this technology existed, in an era when methodologies were more primitive. Today, using the latest 3D seismic abilities, U.S. Emerald can often find sweet spots that were originally missed.
It is the combination of an existing developed area and 3D seismic technology that is so powerful. This is because 3D alone only shows geologic formations where oil may be trapped; it does not demonstrate the presence of oil. But, if this technology is employed in a region that has already produced oil, it can be used very effectively.
Proven Undeveloped (PUD) Zones
PUD formations are pay zones that have been successfully identified, tested, and produced, but the formation still has not been completely produced. Not every developmental well has such a zone, but some will. Why is this significant? Because wells drilled that have PUD zones are successful about 80 percent of the time. Add 3D seismic technology to that set of circumstances, and the success rate can go even higher.
Why Invest In Drilling?
Direct investment in well drilling has attracted sophisticated investors for a number of reasons. First, there is a unique combination of monthly income and potentially substantial investment returns. Income may occur for many years after a successful well is drilled. This type of oil and gas investment is 100 percent tax deductible, and 15 percent of the gross income generated is actually tax-free. Investing in oil and gas can be seen as a hedge against the stock markets and in the global economy.