Oil Industry Bankruptcies:ComingTo Your Portfolio?

1
Commodity Trading Research
Are Oil Industry Bankruptcies Coming To Your
Portfolio?
2
Welcome to Commodity Trading Research Your
premier site for fundamental and technical
analysis for profitable Commodity Trading. For
more info on Commodity Trading Research visit our
website www.CommodityTradingResearch.com
3

• Get Your Free Report on the BEST Commodity
  Stocks!
• Well tell you about this
• Special Offer
• at the end of the video!

4

• Hi, My name is Justin and Im with Commodity
  Trading Research, today were reviewing our
  recently published article

5

• Are Oil Industry Bankruptcies Coming To Your
  Portfolio?

6

• No doubt about it, the recent 20 jump in crude
  prices is a welcome sign. With West Texas
  Intermediate (WTI) back in the mid-40 range
  theres a good possibility late Augusts stunning
  rally set a bottom in the market.

7

• But whatever you do, dont think the worst is
  over for the US oil exploration industry You
  see, loan redetermination season is about to hit.

8

• Thats when oil explorers have the value of their
  oil reservesreexamined by the banks holding their
  loans. Since the price of WTI is down 53 since
  last year at this time, many producers will
  likely find their reserve values have been cut in
  half.

9

• That creates a big problem
• Since oil reserves are the key asset explorers
  take out loans or lines of credit against, a big
  drop in reserve value will create even more
  financial stress on heavily indebted producers.

10

• Borrowing bases (a big source of oil exploration
  liquidity) will be slashed to reflect the new
  value of their properties.

11

• But thats just the start of the problems many
  explorers are about to experience

12

• A large swath of the US oil industry has been
  protected from the crude price downturn due to
  hedging activity. Fact is, many oil explorers
  have been selling crude at 70 a barrel or higher
  this year thanks to hedges created many months
  earlier.

13

• Trouble is, those high priced hedges are about to
  expire. And once they do, oil companies will no
  longer be able to sell their product at an
  inflated price.

14

• Oil Industry Bankruptcies Which Companies Are
  Most At Risk?

15

• While asset redetermination affects the oil
  exploration industry as a whole its the small,
  highly indebted producers that will feel the most
  pain.

16

• You see, once credit lines are slashedit gets
  much harder for financially stressedexplorers to
  access essential operating capital. And since
  theyll start selling oil at current market
  prices, cash flows will dwindle quickly.

17

• As a result, the odds drastically increase of
  small producersbeing sold for pennies on the
  dollar- or going bankrupt.
• Is there any hope?

18

• For most small-cap oil companies its a dire
  financial situation that can only be resolved by
  a return to higher oil prices.
• While the outlook is grim, lets be perfectly
  clear on something

19

• Each oil producers financial situation is
  unique, so its very hard to predict which will
  go bankrupt and which wont.

20

• What I can tell you is this

21

• Many investors mistakenly believe investing in
  oversold small-cap oil producers is great bet
  right now.
• After all, with the share price of many companies
  down 70- 90 in the past year you can pick them
  up on the cheap.

22

• All you have to do is just wait for the
  inevitable return to higher prices- right? While
  that scenario is possible, it has huge risks
  attached.

23

• Fact is, investing in the small-cap oil industry
  is akin to walking through a minefield right now.
  One wrong step and you may find yourself holding
  onto worthless shares of aonce-promising rebound
  story.

24

• Remember, this isnt the first time Ive warned
  you about the huge risks in the small-cap oil
  exploration space. In March 2015. I supplied some
  easy steps to help you avoid the worst companies.
  And just last month I told you about five oil
  producers

25

• Bottom line

26

• While the bottom for crude oil prices may be at
  hand, theres still a long road of financial pain
  ahead for many in the oil industry.

27

• Want More from Commodity Trading Research.com?
• Follow us on Social Media

28

• Want more FREE information on Commodity Trading?
• Commodity Trading Research.com

Get Your FREE Report Now
29
READ THIS FREE REPORT!
The 3 BEST Commodity Stocks for 2015 Trading
Success!
Click Here