The Energy Strategist

Robert RapierMy (Fearless) Energy Predictions for 2015

(The Big Shocker: I Name the Major Oil Company Likely to Disappear Before the
Year Is Over.)

By Robert Rapier

I tend to be skeptical of start-of-the-year predictions, especially those that make vague forecasts of “change” and “volatility.”

After all, when isn’t there “change” or “volatility” in just about any given year?

So, last year I created a bit of a stir when I was so bold as to offer my own predictions for 2014 that were (brace yourself) specific, measureable and unequivocally actionable for investors. If you missed them, my 5 predictions for last year were:

  1. U.S. crude oil production will soar. (It did.)
  2. The price of crude will, as a consequence, fall. (It did.)
  3. The price of natural gas will be higher than in 2013. (It was.)
  4. Obama will NOT lift the crude oil export ban. (He didn’t.)
  5. KiOR, a major biofuel company, will fail. (It did.)

I made the last prediction during a 60 Minutes interview on CBS—much to the chagrin of KiOR venture capitalist Vinod Khosla and program moderator Lesley Stahl. Sadly, my unappreciated prediction ended on the editing-room floor—but I made the call official in a subsequent column. KiOR declared bankruptcy November 9, 2014, affirming losses of $629.3 million. The loss for shareholders was total.

Bottom line: All 5 of my 2014 predictions came to pass and proved to be invaluable advance intelligence for energy investors—especially those holding stock in KiOR before its demise. But that was last year. It’s time now for me to submit…

My (Fearless) Energy Predictions for 2015

Building on my 5 for 5 performance last year as a prognosticator, I hereby put forth 6 energy predictions for 2015:

  1. $40-per-barrel oil is the true price bottom and it will not last.
  2. The price of crude will average more than $60 at daily closings.
  3. You will see lower natural gas prices in 2015.
  4. U.S. crude production will expand for the 7th straight year.
  5. The energy-sector benchmark ETF will rise at least 10%.
  6. Say goodbye to British Petroleum—its days are numbered.

Did you raise an eyebrow at the final prediction?

I believe BP is simply too damaged from the Deepwater Horizon oil spill to fully recover. The company is currently suffering the “death of a thousand cuts” from lawsuits and liabilities. Bits and pieces of BP continue to be sold off, and their pathetic rebranding effort—“Beyond Petroleum”—looks like a flop.

So I predict that BP has had it. It will likely be sold or merged. My sources tell me several integrated super majors look like potential suitors. BP could survive past the end of 2015, but the road ahead is treacherous.

Why My 2015 Predictions Matter to You

Being realistic, I fully understand if the only reason you’d have any interest in my predictions is that they can help you earn greater profits in the coming year!

Take last year. Would you have altered your investing strategy in 2014 if you’d known in advance that the price of oil would fall? Or that despite the media hoopla, the U.S. crude oil export ban would remain intact? Or that one of the most ballyhooed alternative-energy companies in the country would go belly up?

That said…

I know over a dozen energy companies in excellent position to benefit from the 6 predictions in my 2015 “crystal ball.” These are smart outfits, including long-term midstream service providers and cost-conscious producers. They withstood the worst of the 2014 oil-price panic and are equipped to profit in almost any imaginable commodity scenario.

Perhaps of most interest to us—they are all seriously undervalued.

Make no mistake, this is an opportunity to buy today, right now, while the indiscriminate dumping of energy stocks continues unabated. Solid companies have dropped 30% to 60% since the panic began last fall.

I’ve isolated 15 energy companies in exceptionally strong positions—despite the current gloom and doom (much of it unfair) raining down on the entire sector.

My top pick owns the sweetest spot in the Eagle Ford, the most lucrative of all shale plays. These drillers are so cost-efficient, they can produce a 10% profit even with crude at $40 a barrel. If crude rises to $60 a barrel (as I predict it will), their return rate jumps to 50%. At $80 per barrel, their return rate rises to 100%.

As they’re very conservative, I project their share price to rise at least 17% in 2015. Other analysts’ predictions range as high as 33%. That this impressive growth will happen during the sharpest decline in oil prices since the crash of 2008 is testimony to this outfit’s remarkable strength.

This is a great company. I love the sheer quality of their assets. In addition to the Eagle Ford, they own key plays in the Bakken and Permian. Their excellent operating record and impeccable balance sheet are major plus points. I’m advising my subscribers to buy this stock now.

That’s just the beginning, however. Here are a few of the other best-buy investment opportunities I want to tell you about:

  • America is gassing up. With this company, you’ll collect a royalty with every fill-up thanks to their interest in a major gasoline distributor. They also give you a piece of a major new LNG export terminal soon to open on the Gulf Coast. Their 6.4% distribution yield is a standout. Here’s the icing on this cake: Fee-based contracts shield the company from weak energy prices, while cheaper gasoline boosts profits at their filling stations. It’s a win-win. How sweet it is!
  • Meet “the masters of energy diversification.” They are the “toll collectors” of the energy expressway. Own them and you own profitable interests in gas gathering, transportation and processing, crude transport and logistics, gasoline distribution and retailing, plus LPG and LNG exports. In total, a brilliantly leveraged play on growth in midstream services. I like this company for at least a 29% profit upside near term. They’re up 26% over 12 months and offer a 3.22% yield that’s likely to increase at a double-digit rate for years to come.
  • What oil-price panic? With more than 50% of next year’s oil output hedged at $91 a barrel, this producer is sitting pretty. They also possess the “magic touch” for finding and extracting crude. Shortly after acquiring a big chunk of Eagle Ford shale, they quickly pulled a 76% production boost out of the Texas rock. Management expects crude output to increase 20% to 25% in 2015. We’re up 36% over the past year—I project another 20% in gains this year.
  • The cash-flow machine. This best buy has a lock on the manufacture of advanced technical equipment for the entire energy industry. No other company matches the breadth of products and services they offer. This is a highly lucrative business, and this outfit is a free cash-flow machine with an underappreciated servicing revenue stream and a valuation that’s much too low. So low, in fact, I’m giving them a 43% profit upside within 18 months. The 3.21% yield is pure bonus. You want in on this company now because while 2015 looks good, 2016 shapes up as a massive winner for this singular outfit.

Remember, that’s just a sampling.

I’ve identified 10 additional dream investments in my new special report, The Best 15 Energy Buys for 2015, which is yours FREE just for taking a look at The Energy Strategist, my unique financial advisory service.

You can count on this:

As surely as night follows day, energy stocks will rebound from the 30% to 50% sell-off by panicked investors. Join us as we seize the moment and snap up bargain buys BEFORE the market comes to its senses.

Energy Is My Life—Not Just a Hobby

I’ve worked in the energy field for over 20 years. I became hooked on investing at 15, buying stocks with my paper-route earnings.

After graduating from Texas A&M with a B.S. in chemistry and mathematics, and a master’s in chemical engineering, I went to work in the energy business immediately. I’ve been at it ever since.

For two years, I was an efficiency expert at a petrochemical complex in Houston. In Billings, Montana, I figured out a way to blend gasoline that saved the company $9 million a year. For a couple of years, I led a butanol-production team in Germany.

Along the way, I picked up five patents, one for a new way to convert ethane into ethylene, cutting production costs by $5 million per year (U.S. Patent 7,074,977).

My work has taken me all over the globe. For ConocoPhillips, I ran a research lab in Oklahoma developing gas-to-liquids technology. I was on a team in Billings, Montana, optimizing refinery profitability in part by determining which crude oils we should purchase. I headed up a team of engineers in Scotland developing oil and gas projects in the North Sea.

Later, I worked as engineering director for a Dutch environmental-technology company and provided engineering support for a facility they were building in China.

Finally, I’ve taken on a new role conducting technical due diligence on new energy projects. Based in Hawaii, I travel around the world evaluating startup energy companies for wealthy private investors and hedge funds.

After grilling management and assessing the technology on site, I make a go/no-go investment decision that can mean millions of dollars flowing into these cutting-edge outfits.

In other words, I decipher which energy companies have legitimate, game-changing technology and are worthy of investment—and which are exaggerating their capabilities to obtain funding.

So, here’s my free advice about the future of energy overall…

The World Can’t Live (or Grow) Without It

I’m sure you’re hearing a lot about the “oil glut,” the sharp drop in the price of oil and the corresponding panic to sell energy stocks. It’s all over the news.

But historically the price of oil bounces back quickly. It’s Economics 101: When the cost of any commodity drops, consumption inevitably increases and prices rise again.

Already, we see consumers reacting. Right on cue, as 2014 drew to a close, auto sales revved up precisely as the price of gasoline plunged.

You couldn’t ask for a better example of the consumer market in action. GM reports that sales for 2014 were up 6%. Chrysler easily beat that number with sales jumping 20%.

Tellingly, SUVs of all types are roaring off showroom floors as Americans renew their love affair with large, powerful vehicles.

At the bottom of the 2008 crash, oil cratered in the $40-per-barrel range. But remember, at that time the U.S. and world economy were in perilous free-fall, with the entire financial system seemingly on the verge of total meltdown. Energy stocks were pummeled.

Yet they bounced back 56% in less than 24 months.

This time around, the U.S. economy is in much stronger shape, and oversold energy stocks are likely to rebound very strongly and even faster. In short…

This Is a Clear-Cut Buying Opportunity

Energy and growth are symbiotically linked. You can’t have economic growth without more energy—and the world (especially the developing world) wants growth, growth, growth.

A great way to begin profiting from this megatrend is with a complimentary copy of my new report, The Best 15 Energy Buys for 2015, which is yours FREE just for taking a look at The Energy Strategist, my investing newsletter.

All I ask is that you give The Energy Strategist a test run. Put it to your own personal test—the tougher, the better.

With your first issue of The Energy Strategist, you’ll realize it gives you access to some of the most extraordinary investments you’ll ever come across.

How am I doing? You be the judge.

Here’s a current sampling from our portfolio. We’re up…

  • 63% in LNG tankers
  • 71% in major oil
  • 345% in a diversified MLP
  • 818% in pipelines
  • 117% in LNG transport
  • 80% in midstream energy assets
  • 163% in global energy equipment
  • 162% in exploration and production

Please note that these are all current portfolio positions—with plenty of room to grow. And I’m confident they will grow… because despite scary headlines and nerve-jangling market fluctuations, we are living in a transformational era for the energy industry and the entire world.

I’ll call it what it is: a bare-knuckles, trillion-dollar global brawl over energy—and I’m convinced it’s going to last for decades.

“Brawl” is no exaggeration. Consider…

  • European Union countries are desperately trying to free themselves from the energy grip of Russia and its increasingly belligerent leader, Vladimir Putin. The struggle has generated the biggest East-West European crisis since the Cold War.
  • Feisty Canada is risking an international incident with Russia by claiming the North Pole and the 90 billion barrels of oil and 1,670 trillion cubic feet of natural gas estimated to lie beneath it.
  • China and Russia appear to be partnering up on a troubling (to the West) new energy partnership. Beijing has already agreed to buy more than $350 billion of Russian crude oil in the coming years.
  • At the same time, China is throwing its weight around in the South China Sea, a region with its own energy riches. Five other nations—Vietnam, Brunei, Malaysia, Taiwan and the Philippines—also claim parts of the sea and are on the receiving end of Chinese threats to back off or else.
  • Canada was furious with the U.S. over Obama’s six-year “dither” over the vital Keystone XL Pipeline. The pipeline would've transported crude from Alberta’s oil sands to Gulf Coast refineries, but Obama just vetoed it. Now Canada will build new pipelines to the Pacific coast to ship its spurned oil and gas to… here it comes… China.

Here’s the Bottom Line

Quite simply, The Energy Strategist is the most comprehensive investing source available today… not only on America’s energy revolution, but on energy opportunities across the world.

I’m looking at every energy source out there: oil, natural gas, solar, wind, hydro, biomass, geothermal… everything.

My staff and I search for investing gold in energy exploration, recovering, refining, gathering, processing and transport, as well as one of the great opportunities primed to create new wealth: liquid natural gas (LNG) exporting.

Here’s another huge opportunity we’re covering…

Did you know solar energy is making the leap from backyards and rooftops to electrifying entire cities? It’s happening. In California, there’s a solar installation coming online that will power a city of 400,000—that’s the size of Oakland, CA.

I’m recommending three solar stocks that are leading this shift. In the past 12 months, they are up 24%… 53%… and 125%. And that’s quite likely just the start, because this trend is virtually unstoppable. You’ll find these stocks in your first issue of The Energy Strategist.

After you receive my new special report, The Best 15 Energy Buys for 2015, you’ll find a whole universe of energy opportunities in our:

  • Two monthly issues. Twice a month, I’ll send you my latest energy investment research, including new recommendations, updates and analysis.
  • Energy Strategist Flash Alerts. Anytime there’s breaking news on one of our positions or a new opportunity that can’t wait until the regular issue comes along, you’ll receive a Flash Alert.

When you join, you’ll also get members-only access to The Energy Strategist website, where you’ll enjoy a host of powerful tools like:

  • An easy-to-navigate archive of all my research. That includes every issue, special alert and report I’ve ever written. It’s the most comprehensive coverage of America’s energy renaissance out there, and chock full of ways to profit from it.
  • You’ll also get access to my Conservative, Growth and Aggressive Portfolios. Each portfolio is updated every day with a detailed status of every pick I’m recommending, so you’ll always know where you stand.
  • I’ll also email you a special subscribers-only bulletin called The Energy Letter every week at no extra charge. In addition to breaking news and market commentary, I use this bulletin to update my portfolio with new buy/sell recommendations.
  • First-class customer service. If you ever have a problem or a question, our friendly Customer Services staff is here to help. Send us a quick email or call us toll-free. No matter which you choose, we’ll do everything we can to make you happy.
  • My zero-risk guarantee. I want you to be 100% satisfied with The Energy Strategist. That’s why I’m giving you three months to try it out and experience everything it has to offer. If you aren’t happy, let us know and we’ll quickly issue you a full refund.

One more thing: As a subscriber, you’re also invited to join our monthly online chats. You can “fire away” and ask specific questions about anything you want.

If you can’t wait for one of these chats, just shoot me an email or post your question on our website. I’ll get back to you as soon as I can.

Keep in mind, a package of investor services like ours typically costs $1,000 to $3,000 a year.

By contrast, The Energy Strategist’s package of investor services (24 monthly issues delivered online, weekly website articles, immediate-action Flash Alerts via email, access to me personally every month in our online chats) costs only $697 a year, easily one of the best bargains in all of financial publishing.

With this special invitation, you can start a no-risk one-year subscription for just $497. You save $200 from the get-go—with a full, 100% money-back guarantee.

Or here’s a better idea: Try a quarterly subscription to The Energy Strategist for only $147—with a full three months to evaluate our recommendations.

Either way, you have a full 90 days to try it out risk-free. If you decide it’s not for you, just let us know and we’ll send you your money back—every penny of it. After 90 days, you can still get a refund for the unused portion of your subscription at any time you decide to cancel. (The special report is yours to keep, along with my thanks for giving The Energy Strategist a try.)

Remember, the risk of trying The Energy Strategist is… zero.

If, over the next three months, you’re not satisfied, I want you to ask for a full, 100% refund. (My new special report, The Best 15 Energy Buys for 2015, is yours to keep, along with my thanks for giving The Energy Strategist a try.)

Time is of the essence. Investors will soon wake up and realize they panicked badly and sold energy stocks low—in other words the opposite of Warren Buffett’s investing rule, “Buy when others are fearful.”

They’ll start buying energy stocks again, and our rebound bargains will melt away as these stocks rise.

But get in now and you’ll reap windfall profits just as many investors did in the months following the financial crisis of 2008-09.

You’ll find everything you need to know about this fast-breaking opportunity in The Best 15 Energy Buys for 2015. It’s yours free just for taking a no-risk look at The Energy Strategist.

I hope to hear from you today, if possible—so I can give you immediate access to this time-sensitive new report absolutely FREE. Get it now.


Robert Rapier

Robert Rapier
Chief Investment Analyst, The Energy Strategist

P.S. As soon as you join The Energy Strategist, I’ll rush you The Best 15 Energy Buys for 2015. The last time oil shares bottomed like this, they bounced back 56%. This is a screaming BUY opportunity. These solid, unfairly punished companies can be had at fire-sale prices—if you grab them now.

P.P.S. Keep in mind, this is a special pricing offer for The Energy Strategist. You will never find it for less.

And remember, your risk is zero with this offer. So you’ve got nothing to lose by giving it a shot.

You’ll have the next three months to make up your mind. In other words, you are only agreeing to try my work to see if you like it.

If you don’t, no problem. Simply call our Customer Service team and we’ll issue you a 100% refund. No “restocking fees”… no hidden charges… no strings whatsoever. The report on The Best 15 Energy Buys for 2015 is yours to keep.

Make the right decision—activate your no-risk subscription to The Energy Strategist today.