Revealed: Keith Kohl’s “Trillion Dollar Drill” Stock

Hello, and welcome back to another stock de-teaser.

Today we're going to look at the latest presentation from Keith Kohl.

In this teaser, he claims a "little known Texas firm just unleashed the biggest breakthrough in global energy history.:

And that this company has a "Trillion Dollar Drill."

Of course, Keith wants you to pay money to learn the name of the stock he's pitching, but I have good news.

He left enough clues to figure out the name of the stock he's pitching, and I reveal it below.

Along with this, I'll breakdown the stock so you can determine if it's worth investing in or not.

Let's get started!

Breaking Down The Teaser

Before I reveal the name of the stock, I want to look at the teaser first.

In this teaser Keith Kohl is hinting at a new drilling method called "horshoe drilling."

While still relatively new, horseshoe drilling is gaining traction in the oil and gas industry, particularly for exploiting unconventional reservoirs like shale formations. Here are some key details about the process:

Drilling Process:

• Horizontal Laterals: The key element is the U-turn shape created within the reservoir using a technique called horizontal directional drilling (HDD). Advanced computer technology guides the drill bit along the planned trajectory.
• Drilling Rig Selection: Due to the complex turning maneuvers, rigs with high turning capabilities and precise steering control are used.
• Target Depth: Depending on the reservoir location and thickness, the wellbore will reach a certain depth before the U-turn begins, leading back to the starting point at a shallower depth.

Benefits and Challenges:

• Economic Advantages: Horseshoes can potentially reduce drilling costs by requiring fewer well pads and shorter drilling times compared to multiple straight laterals.
• Reservoir Access: The looped path maximizes reservoir contact, potentially boosting production rates and recovery.
• Technical Challenges: Precise steering and wellbore stability are crucial, requiring skilled personnel and advanced drilling technology. Geological complexities can also present challenges.
• Regulatory Requirements: Depending on the region and specific reservoir characteristics, obtaining drilling permits and complying with environmental regulations may be complex.

Future Potential:

As technology and expertise improve, horseshoe drilling is expected to gain wider adoption in unconventional resource development. However, continued research and development are needed to optimize the technique and address existing challenges.

There's a couple companies that have successfully drilled in this manner.

One of those companies is Matador Resources, which is the company that Keith is pitching.

What Is Matador Resources?

Matador Resources is an independent energy company based in Dallas, Texas, with a primary focus on exploring, developing, producing, and acquiring oil and natural gas resources in the United States. Here's a breakdown of their key aspects:

What they do:

• Exploration and production: Matador specializes in unconventional plays, particularly oil and gas shale formations like the Wolfcamp and Bone Spring in the Delaware Basin (Southeast New Mexico and West Texas). They also explore some conventional targets.
• Midstream operations: To support their exploration and production activities, Matador operates midstream facilities. These facilities provide services like natural gas processing, oil transportation, and gathering and disposal of produced water, both for their own needs and for third-party customers.

Key characteristics:

• Independent: Matador is not affiliated with any major oil and gas companies, allowing them greater flexibility and control over their operations.
• Risk-balanced portfolio: They focus on creating a diversified portfolio of exploration opportunities, balancing riskier unconventional plays with more stable conventional targets.
• Emphasis on oil and liquids: While they produce both oil and gas, Matador prioritizes oil and liquids-rich areas within their target formations.

Horseshoe drilling

Instead of drilling four separate 1-mile horizontal wells, Matador experimented with two, U-shaped, 2-mile "horseshoe" wells in their Wolfcamp asset area. This innovative design boasts several advantages:

• Reduced costs: Matador estimates $10 million in savings by eliminating two vertical well sections and drilling less overall pipe.
• Faster production: Drilling and completion times cut in half compared to four separate wells.
• Increased reserves: Horseshoe wells reach a larger area, potentially accessing more resources.

The future of horseshoe drilling:

The pilot project was successful, and Matador is optimistic about further deployment. They expect to bring the first horseshoe wells online later in 2023 and add an eighth drilling rig specifically for this technique in 2024.

Overall, Matador Resources is an independent energy company taking bold steps towards efficiency and growth. Their innovative horseshoe drilling technique shows promise for reducing costs and boosting production, potentially shaping the future of unconventional oil and gas development.

Pros Of Investing In Matador Resources

Investing in Matador Resources (MTDR) comes with both potential pros and cons, and the decision to invest depends on your individual risk tolerance and financial goals. Here are some potential pros to consider:

Strong financial performance:

• Profitable growth: MTDR has shown consistent profitability in recent years, with increasing revenue and earnings. This indicates financial stability and the ability to generate returns for investors.
• Increased production guidance: The company has recently raised its production guidance for the fourth quarter of 2023, demonstrating confidence in its drilling and development activities.
• Debt reduction: MTDR is actively reducing its debt, which improves its financial health and reduces risk for investors.

Focus on unconventional resources:

• Unconventional plays offer potential for significant returns: MTDR primarily focuses on unconventional oil and gas plays like the Eagle Ford Shale and the Delaware Basin, which offer high potential rewards for successful exploration and production.
• Diversification: The company's portfolio includes both exploration opportunities and low-cost producing properties, providing some diversification from volatile commodity prices.

Other potential benefits:

• Experienced management team: MTDR has a team with extensive experience in the oil and gas industry, which can help mitigate risk and navigate market challenges.
• Midstream operations: The company owns midstream infrastructure that supports its production activities, which can generate additional revenue and improve profitability.
• Dividend potential: MTDR has a history of paying dividends to shareholders, providing a source of income for investors.

Cons Of Investing In Matador Resources

Here's a deeper dive into some potential drawbacks to consider:

Volatility:

• Commodity price swings: MTDR's revenue and profitability are directly tied to oil and gas prices, which can be volatile due to factors like global demand, geopolitical events, and supply disruptions. This can lead to significant fluctuations in the stock price, making it a risky investment for those seeking stability.
• Exploration risk: Drilling for new oil and gas reserves is inherently risky, with no guarantees of success. Dry wells or disappointing production volumes can significantly impact MTDR's financial performance and investor confidence.

Environmental concerns:

• Regulatory pressure: The oil and gas industry faces growing pressure from governments and environmental groups to reduce its carbon footprint and transition to cleaner energy sources. This could lead to stricter regulations on emissions, drilling activities, and pipeline development, increasing MTDR's operational costs and impacting profitability.
• Social and environmental impact: Public opposition to fracking and other oil and gas extraction methods due to concerns about water pollution, air quality, and climate change can negatively impact MTDR's public image and potentially restrict access to new resources.

Competition:

• Large players: MTDR operates in a competitive market with established oil and gas giants like ExxonMobil and Chevron. These companies have larger financial resources and operational capacity, making it difficult for MTDR to secure new acreage and maintain market share.
• Technological advancements: The oil and gas industry is constantly evolving, with new technologies emerging for exploration, drilling, and production. Failure to adapt to these changes could leave MTDR at a disadvantage compared to competitors.

Other potential cons:

• Limited diversification: MTDR primarily focuses on unconventional oil and gas plays, which exposes the company to specific risks associated with these formations and leaves it vulnerable to downturns in that particular market segment.
• Debt burden: While MTDR is reducing its debt, it still carries a significant debt load compared to some competitors. This can limit the company's flexibility to invest in growth opportunities or weather economic downturns.

Conclusion

So that's the end of this overview of Keith's latest teaser.

He's hyping up horseshoe drilling, and his favorite stock for this trend is Matador Resources.

Do you feel the same way Keith does?

Let me know in the comments below!