05/04/10 Pittsburgh, Pennsylvania – Things are bad in the Gulf of Mexico. Oil is gushing out of the ill-fated BP well. The spill is out of control, despite the best – even heroic – efforts of many industry and government players. There’s no quick solution on the horizon. In my view, things are likely to get worse before they get better.
So where do we, at Outstanding Investments, go from here? What does the Gulf of Mexico disaster mean to the many offshore deep-water-related companies in the OI portfolio?
Don’t Panic. Don’t succumb to screaming headlines. For as bad as the Gulf of Mexico disaster is – yes, it’s bad – I’m not recommending that you sell out.
I’m convinced that offshore development will continue, and it will continue in deep water… It’s just a scientific, geologic fact that much of the world’s future oil supply is offshore, under deep water. Despite the offshore Gulf disaster, there is still a global push for oil from deep water.
Right now – and there’s no nice way to say it – the situation is truly ugly. There’s a major oil spill to control and clean up. In the US, we’re certain to see much tighter regulation and higher costs for working offshore. And d’you know what? That’s fine.
There’s no such thing as being ‘too safe’ in an ultra-dangerous environment. But danger or no, offshore energy development is NOT going away.
Byron King
for The Daily Reckoning
Byron King
Byron King is the managing editor of Outstanding Investments and Energy & Scarcity Investor. He is a Harvard-trained geologist who has traveled to every U.S. state and territory and six of the seven continents. He has conducted site visits to mineral deposits in 26 countries and deep-water oil fields in five oceans. This provides him with a unique perspective on the myriad of investment opportunities in energy and mineral exploration. He has been interviewed by dozens of major print and broadcast media outlets including The Financial Times, The Guardian, The Washington Post, MSN Money, MarketWatch, Fox Business News, and PBS Newshour.
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Well,,,, In my humble opinion,,,, higher costs as a result of new strict regulation and an even lower opinion of drilling has the potential to push oil exploration to other areas of the world. As a result fuel costs in the US may sky rocket making any industrial comeback a pipe dream…
most are overlooking the enormity of this disaster
the Gulf will become a dead sea
political will can and has and will again make the situation change
Mr King repeatedly follows a facile logic to thinly structured solutions, recommendations, and bloviations.
Other than that, the article is pretty right on.
Too late BK. I sold my BP this morning at $50.8
I think BP will be great in the future, but like you, I think things will get worse before they get better. This being the case, why wouldn’t I sell?
Obviously would have better better a month ago, but this happens. If you are sitting on long term gains like I was, and you think the price is going down in the short term, why not sell?
I am sure I will sleep better tonight.
Cheers.
Recently, I read tales about ‘China lake’ lying just offshore, that holds great promise. The lake reportedly produced clean hydro-carbon for the adjacent states. And, easy to access, tap and supposed to satisfy the entire US consumption. Was that real or just a legend for the folks?
Said like a true investment specialist.
corruptionstoppers@yahoo.com
When the oil hits the Dry Tortugas, then Key West, then Miami, we will know it is in the Gulf Stream and headed eventually to England and Norway…9 months to get to the UK and 12 to Norway….(via east florida of course).
Their shares are not going anywhere but down for the next 2 or 3 years at least.
Sell the hell outta there and buy physical gold surely!!!! (especially now it has dropped to $1158 today!)
My bet is that this article is possible the WORST piece of investment advice I have EVER seen. Don’t sell BP….haha get real!
Byron – Have you considered that getting to the deep water oil is just too hyper-complex for our engineers to pull off?? Is that “Inconcievable” as Vizzini so often exclaimed in The Princess Bride…
“On Friday, Oil giant BP’s share price fell more than 15% to £4.20, its lowest level since April 2009″
Did you sell yet Byron or are you clinging to the hope BP is too big to fail too!!!