The concept you are describing is pretty common and fairly reliable. Hold a core position, but tactically trade around a portion of the position for short to medium term gains. There is a start up brewery here in Houston called Karbach, and it's the only premium microbrew I've seen that sells it's beers in a can. I had a 6 pack of their Hopadillo IPA, which is a dark beer obviously, but it's got lots of flavor and a good kick to it.
Here's another thing I wanted to share. Before I took this seminar, I believed in the Hollywood representation of oil strikes where if you drill and hit oil a giant geyser of oil should shoot up into the sky and cover everyone in oil. Holy canoli I can't believe how absolutely childish that was, it's like believing that storks bring babies or something like that.
If there is ever a geyser of oil shooting out of the well that's called a blowout, and it's extremely dangerous and it means somebody screwed up big time and there's a good chance that there could be an explosion. That is why there are blow out preventers installed on top of the surface casing so that if they notice a kick in pressure and it's not going down, someone is standing ready to flare the gas and shut off the valves.
Another misconception I had in my head was that all oil wells needed pump jacks. This is yet another thing learned from TV and just seeing the pump jacks around here in Texas and associating that with oil production. Pump jacks are those see saw looking things that pump oil out of the ground. The truth is that initially many wells do not need additional pressure to get the oil out in commercial quantities, and pump jacks are often installed to improve the recovery rate towards the end of the life of the well.
Essentially what companies are trying to do once the well is completed is to cause a differential in the hydrostatic pressure between the reservoir rock (the rocks that store the oil) and the well bore (the hole they drilled). They want the pressure in the well bore to be lower than that of the reservoir rock so that the oil goes in and comes up the hole. They can create this pressure differential through pump jacks (mechanical lift), injecting water, steam, and even Co2 into the ground around the formation and source rock.
I actually got to know a classmate who's company drills for Co2 and exclusively does secondary recovery of wells through the injection method.
Down in Belize we saw the pictures of the pump jacks being installed. This means that the pressure from the formation is not high enough to move commercial quantities of oil from the reservoir rock up to the surface on it's own, and they need the assistance of "mechanical lift" in order to facilitate the process. I remember some remarks from the bashers saying something to the extent that it could be to just pump water out of the ground. That is evidence of their complete and utter ignorance of the oil industry because they do not even know what a pump jack is for and to say that it will be used just for water is just stupid.
Furthermore, back in February when the Prime Minister said that Treaty did not find oil but only traces of tar, that is a highly dubious statement. Tar is pretty much oil that has been heated and pressured for so long that alot of the the gasses of escaped and hence the api weight is very low and it is very thick. In other words by saying "we only found tar" the PM meant to imply that they did not find oil but something that is not oil but often mistaken for oil.
However, as I just explained, tar is oil. If you ever heard of the Labrea Tar pits or are familiar with the Canadian tar sands then you know that tar is just another form of oil. It is expensive to refine but it can be done for the right price, but the point I'm trying to make is that by trying to mislead people into thinking there was only tar but no oil, the PM went on the record and actually admitted that there was oil because tar is oil.
The reason that I still don't believe the PM's statement that there was tar but no oil, is that Belize Natural Energy was supposed to have been pumping 32 API oil which is not tar like but very sweet or high gasoline content with low impurities. That is why there were stories of illegal oil wells with make shift refineries, which were really just stills. In other words, the PM should have just flat out denied any hydrocarbon finding instead of trying to say there was only tar and not oil. By doing so he actually screwed up because "tar" would not just pop up arbitrarily on a rock cutting like moss on the stone.
If anything, if there were tar, it would not be isolated on one solitary rock, there would be a reservoir of it with at least thousands of barrels worth if not more stuck in the reservoir rock. There would also be lighter oil and gas because tar is just over cooked oil, and there would probably be some undercooked oil and there would definitely be a bunch of gas as that is what is what gets cooked out of the oil over time.
Once again gentlemen, I highly suggest reading up on this kind of stuff or taking a course to help bring you up the curve if you are not in the oil and gas industry if you plan on making more investments in this space. There's so much to learn and I really feel I'm just scratching the surface.
