The Energy Industry is Presenting an Attractive Opportunity for Investors
Viking has solidified relationships with industry experts and formulated a responsible acquisition strategy, with emphasis on acquiring under-valued, producing properties from distressed vendors or those deemed as non-core assets by larger sector participants. We are not considering speculative exploration programs, but target properties with current production and untapped reserves for future upside.
Crude oil is one of the most demanded commodities with the International Monetary Fund projecting global growth in oil demand of 3.5% in 2015 and 3.7% in 2016. The demand for crude oil is dependent on global, economic and geopolitical conditions as well as market speculation.
For much of the past decade, oil prices have been high because of soaring oil consumption in countries like China and conflicts in key oil nations in the Middle East. Oil production in conventional fields could not keep up with demand, causing prices to spike.
As oil prices increased, many energy companies found it profitable to extract oil from difficult-to-drill places. In the United States, for example, companies began using techniques like fracking and horizontal drilling to extract oil from shale formations in North Dakota and Texas. This led to a boom in "unconventional" oil production.
Over the past year demand for oil in places such as Europe, Asia and the U.S. tapered off, thanks to weakening economies and new efficiency measures. Unused oil was simply being stockpiled for future utilization. As a result, in the fall of 2014 prices started falling sharply, thus creating unique acquisition and investment opportunities as a result of certain companies needing to restructure (i.e. sell assets) and adjust to new economic models. Viking is capitalizing on such opportunities.