The price of crude oil and
natural gas is the engine that drives the energy industry. In
the late 1990’s, in the wake of the Asian economic downturn,
oil prices sank to $10.00 per barrel. The slump drove many small
independent oil and gas producers out of business and many of
the large independent producers merged, resulting in a downturn
of drilling activities. Oil service companies had fewer rigs
to service, pipeline and storage companies had less oil and
gas to transport and store, and refineries produced less gasoline
and other petroleum products.
The global economy has rebounded in the new millennium. Demand
for crude oil, natural gas and petroleum based products has
soared in the United States, China and India. This increased
demand for energy and the political turmoil in oil-producing
regions has caused energy prices to soar and the industry has
rebounded. The higher prices have reached most of the industry
- producers, refiners, pipeline companies, equipment makers,
oil field service providers, and gas station operators - which
have all enjoyed new profits. Leading the charge are the world's
largest integrated oil companies: Exxon Mobil, BP and Royal/Dutch/Shell.
But aggressive domestic independent production companies, such
as Avalon Oil & Gas, are also well-positioned to take advantage
of improving prices.
Avalon Oil & Gas, Inc. focused on acquiring mature, oil
and gas wells in Kansas, Oklahoma, Texas and Louisiana.
The Department of Energy's Office of Fossil Energy has reported
there is the potential to meet the demand for an energy thirsty
nation by recovering over 43 billion barrels of additional oil
from currently stranded oil reserves and mature oil and gas
wells in the United States. www.fossil.energy.gov
Developing these resources will provide significant revenues
to state treasuries, provide thousands of additional domestic
jobs, and improve the U.S. trade balance by reducing imports.