Many investors often look to the larger oil and gas developers for a safe investment, and in a certain sense these types of companies are perhaps one of your more safe investments. Energy after all is always a need. There are, however, companies on the verge that may make better investments as they move forward with production and development plans. While some may look left at these more main-stream players, looking right for those companies that may be in the right place at the right time may be a bit more profitable. Care needs to be taken and research done, but if one picks wisely, profit will be there.
American Oil & Gas Inc., an oil and gas exploration company, works to explore and develop crude oil and natural gas deposits primarily in Colorado and Wyoming. The company holds natural gas interests through its American Tower Inc. subsidiary but is generally more focused on crude oil property development.
Currently, the company controls a large amount of acreage for the purpose of crude oil development. Among these holdings are 53,000 acres in the Powder River Basin WY., 128,000 acres in Niobrara county WY., 87,000 acres in the Williston Basin ND. and 175,000 acres in and around the Rocky Mountain region. Although carrying costs are somewhat of a concern, the company does appear to have chosen its locations well. Each of the areas chosen for lease and land purchase are well known oil producing regions with, for the most part, known output potential.
As of date, the company has begun several drilling process projects with its Fetter Field project being its most recent. Natural gas pricing notwithstanding, oil prices appear to be at a solid level and will aide in the return of the company’s long term revenue structure after oil price retreated during recent quarters. In a general sense, the company’s cost structure is a bit higher than one might like, and susceptible to swings in crude oil pricing. At present, however, pricing is in a solid place for the company and at a level where profits will be reaped.
Perhaps the largest advantage that American Oil & Gas offers is its ability to draw on all aspects of the oil and gas marketplace. It sells not only the natural gas it finds but the by-products that come from the processing of that gas. Where exploration and drilling of crude oil is concerned, it uses all avenues of royalty and contracts to get the product out of the ground at the best return for the company. In the crude game this is no small matter and one that bares notice when assessing a company.
With approximately $19 million in working capital at mid-year 2009 the company does appear to be moderately capitalized. As crude oil prices are estimated to move a bit higher, American Oil & Gas looks to be in a good place and ready to capitalize. One may need to keep a little closer eye on where the price of crude is going but for now American Oil looks like a solid company to check out.
Let us hear your thoughts below:
