Keith Kohl’s “Horseshoe Well” Company – Best-Performing Oil Stock of the Next 12 Months?

Nestled deep in Texas’ bustling Permian Basin, one tiny company has developed a new drilling method that promises to be the biggest oil and gas breakthrough since fracking.

Keith Kohl says this “Horseshoe Well” Company's technique puts all others to shame and it could mint a new wave of oil and gas millionaires.

 

The Teaser

The standard drilling method is straight down and sideways to reach the oil-rich shale. There are a few problems with this.

Keith Kohl is the director of energy research at Angel Publishing. For the past 20 years, he's been on top of every major trend in the energy industry, and this one may be the biggest yet. We have revealed more than a few of Keith's previous picks here in the past, including his “#1 Oil Stock of the Decade” and “Black Winter” LNG Stocks, among others.

For starters, oil wells typically only cover a 1-mile area, limiting the amount of oil you can extract from a specific plot of land.

However, the “Horseshoe” technique drills down, rotates 180 degrees and then drills back toward its starting point. Here is a side-by-side illustration of both methods:

In short, it’s like getting a second oil well for free, as the method doubles or even triples oil output from the same piece of land. But more oil isn't the only advantage it has.

Redefining Oil Extraction

Traditional drilling is expensive.

How much exactly are we talking about here?

Just the drilling phase alone can push operating expenses beyond $4 million for a single well. Now you know why startup guys aren't drilling for oil.

Since the “Horseshoe Well” method consolidates what would normally be two separate wells into one, this has led to a 50% reduction in drilling time and costs. Not only this but because this approach requires fewer wells being drilled compared to the traditional method, the environmental impact on the surface is also significantly reduced.

• Superior efficiency
• Cost-effectiveness
• And a more environmentally friendly approach to oil extraction

This technique is already being deployed in the oil-rich Permian Basin, but I see the potential for worldwide deployment if it's everything described.

It could also make shares of the small Texas firm behind the game-changing technique gush, like a newly drilled well.

 

The Pitch

Keith has compiled all the details on this firm in his newest report, “The ‘Horseshoe Well’: The Breakthrough Set to Revolutionize the $4.3 Trillion Oil Market.”

All we need to do to claim the report is take Keith's Energy Investor newsletter for a spin. If we act now and don't procrastinate like we do with Christmas gifts, we can lock in a special price of $99 for the first year. 

If we join, 12 months of investment ideas await, along with two bonus reports, a free subscription to the Energy and Capital newsletter, and a 180-day money-back guarantee.

 

The Greatest Creator of Wealth in History

I believe it is real estate that has created more millionaires than any other industry throughout history.

However, the U.S. oil and gas industry has produced more than its fair share.

This shows no signs of slowing down.

Global oil demand hit a record high of 103 million barrels per day this past summer and is expected to average 102.2 million barrels per day (bpd) for the year.

While supplies are adequate for the time being, this could create a global supply crunch down the road…if proven reserves aren't tapped.

Bloomberg confirms this, saying “The easiest-to-reach crude has been extracted. New technology will be the key to future oil output for a U.S. shale industry that’s starting to show its age.”

Oceans of Oil

The good news is, that there are an estimated 55 billion barrels of proven crude oil sitting beneath our feet in U.S. shale fields today. An ocean of oil.

The bad news is, that fracking is still very inefficient, often leaving behind up to 50% of the oil still trapped in the shale.

Enter the “Horseshoe Well” Company.

Keith maintains it’s poised to redefine oil extraction with its revolutionary drilling technology.

To the man's credit, this isn't all pie-in-the-sky projection. 

The tiny driller of which Keith speaks is profitable, very profitable.

In the second quarter of this year, the firm’s CEO reported record production, of more than 130,000 barrels of oil and gas produced per day. Overall, he’s anticipating 40% growth in production for the year.

It's all thanks to its proprietary drilling technique, which is setting a new standard for the $4.3 trillion oil industry and perhaps the global energy market.

The fracking boom created as many as 2,000 new millionaires every year in North Dakota alone. Keith says the breakthrough “Horseshoe” drilling technique that’s poised to double our oil output will dwarf this, as it will help trigger an explosion in domestic oil production.

Let's find out the name of the Texas oil company that created it.

 

Revealing Keith Kohl's “Horseshoe Well” Company

We are given quite a few details about this prospective oil giant. Here is what we know:

• This firm owns 150,000 acres in the heart of America’s most prized oil field – the Permian Basin.
• The CEO built his first oil company from scratch in Texas with just $270,000, and he later sold it for $388 million.
• It is seeing immediate results from the “Horseshoe Well,” method including $10 million in savings compared with the cost of traditional drilling methods.

The second clue gave the name away, Keith is teasing Matador Resources Company (NYSE: MTDR). 

• Matador owns 150,000 net acres spread across its operations in southeastern New Mexico as well as across the state line in western Texas.
• In a press release from January announcing a bolt-on acquisition, Matador's company description includes a bit about founder, Joseph Wm. Foran, and how he started the Foran Oil Company with $270,000 from family and friends and eventually sold it for $388 million.
• Matador noted in its Q3 report that it achieved cost savings of approximately $10 million by drilling two, two-mile lateral wells as compared to four one-mile lateral wells.

 

The Best-Performing Oil and Gas Stock of the Next 12 Months?

There is a lot to like about Matador Resources.

The stock has outperformed the S&P Oil and Gas Exploration Index since its initial public offering in February 2012, and it is experiencing record production.

A slam dunk investment right?

As far as I can tell, only one thing is holding the stock back from breaking out – debt.

Matador has just $26 million cash on hand against nearly $1.1 billion of total debt.

Granted, all of this is long-term debt, rather than short-term liabilities, with most of the debt being in the form of $700 million worth of senior unsecured notes. These don't come due until 2026, but it's a big loogie hanging out there, which the market is weary of.

This is no doubt why Matador stock is currently selling for less than 9x trailing earnings. Its saving grace is the substantial free cash flow it generates on an annual basis, which is enough to handle capital expenditures and leave enough over to incrementally pay off debt. 

We don't have a crystal ball, but with no immediate solvency threat and a positive long-term macro outlook, the stage may be set for Matador stock to outperform over the next few years.

 

Quick Recap & Conclusion

• Keith Kohl has discovered a tiny company that has come up with the biggest oil and gas breakthrough since fracking. This “Horseshoe Well” Company's drilling technique puts all others to shame and could mint a new wave of oil and gas millionaires.
• Its technique enables it to basically get a second oil well for free, as the method doubles or even triples oil output from the same piece of land and Keith says it could make shares of the small Texas firm behind the game-changer gush.
• Keith has compiled all the details on this firm in a new report called “The ‘Horseshoe Well’: The Breakthrough Set to Revolutionize the $4.3 Trillion Oil Market.” All we need to do to claim the report is take Keith's Energy Investor newsletter for a spin. It's currently going for a special price of $99 for the first year. 
• Fortunately, a clue from Keith led us to be able to reveal the stock for free as Matador Resources Company (NYSE: MTDR). 
• Matador Resources has a lot going for it and it is selling for a low absolute price. The oil producer has a bit more debt on its books than we would normally like to see, but it generates enough free cash flow to tend to it and its capital expenditures.

Does the “Horseshoe” drilling technique give Matador enough of a competitive advantage? Let us know your thoughts in the comments.