Kerry65, 40 cents represents an absolutely one off chance to buy...

Kerry65,
40 cents represents an absolutely one off chance to buy SXY at a rock bottom price. As we have seen before a drop in the oil price curtails investment which shortly thereafter results in prices going higher again. Forget all the media hype from the IEA, CNBC and so called experts about the USA shale oil story. It is a 5-10 year ponzi scheme. Huge depletion rates and high costs plus an increasing environmental pressure. But I do grant that in the meantime it will prove a boon to the USA. And then reality will set in.

This energy scene is so complicated that I doubt whether you could build a model to replicate it.

150 million years ago crude oil was formed due to a set of conditions that will not been duplicated. This precious finite resource has been exploited to the stage where conventional oil production peaked in 2006. Instead of falling rapidly it has managed to plateau due to increasing crude oil prices. In other words the best fruit has already been plucked. To maintain conventional crude oil production you need high prices to pay for the increasing costs of offshore oil exploration. And basically the world can't afford it.

And that is why the world is turning to gas. For both economic and climate change reasons. And that is why the Majors of the world have built 3 LNG plants at Gladstone. Costing $70 odd billion.These plants have supply contracts to supply Asia at triple the price ( plus freight ) currently prevailing locally in Eastern Australia. And it is all about to happen within the next year. And for various reasons the contracted CSG gas supply is under threat and according to some sources there is a 50 % shortfall.

And that is why, early in the piece , SXY decided to go to the Cooper Basin. To exploit the considerable reserves of tight gas. And pipe it to Gladstone. In a few years time SXY's revenues will be mainly from gas.Into a high priced market.

There is a very good post from Chrysalis on the Oil and Gas general site together with references about the world gas stage. It is complicated and full of turmoil and war. There is a chance that Australia could become one of the leading world gas suppliers if things go wrong in the Middle East. Things are not good there. And they won't be until ISIS is removed and Syria resolved. In the meantime the Saudi's employ 30,000 people just protecting their oil. Last week there was a pipeline attack where at least 10 were killed.

Sorry this is a bit disjointed but in summary

The world is turning to gas. And SXY has gas in Spades.