What the average share punter does not realise with spec oilers is:
1. 5 to 10% success rate equals 90 to 95% failure rate, so the odds are way against you. The successful wells cannot be picked in advance.
2. A beautiful rising chart on an oiler has nothing to with success or failure of the well
3. The rising chart of an oiler is an opportunity to trade, but only until the spud of the well
4. Mr Market does not give as much success on discovery as first supposed, as the well is not commercial until in production, which can take a long time. The leverage of success does not justify the risk to the traders equity given the high odds of failure.
5. There is very good money to be made in spec oilers. Just find the niche that is profitable, which is in the pre-spud phase.
