Asymmetric Offshore Opportunity Backed by Oil-Majors. Bonus: External Expert Analysis Included!
For pennies on the dollar, a portfolio of carried interests in offshore projects operated by supermajors, with minimal capital requirements and asymmetric upside potential.
When I first considered launching Bison Insights, my original thought was to focus exclusively on high-upside, high-risk ideas. The concept was “10x potential ideas at $100 oil.”
However, with natural gas prices inflecting, I found more compelling near-term value in natural gas producers and services companies. So I broadened my focus to writing about my favorite stocks in the oil and gas sector, and the initial ideas have substantially outperformed, with more recent ideas needing time to prove out:
In this article, I’m revisiting the original theme by writing about an idea that is a potential ten-bagger - but might not need $100 to achieve that! This company is a small offshore explorer with interests in potential world-class assets operated by several of the largest oil companies in the industry. In its most promising assets, it is being “carried,” which means the major operators fund the early stages of exploration and development and the smaller company I’m writing about does not deploy capital (on some key assets) until the projects begin generating revenue.
If any one of these projects succeed, the resulting value could be a multiple of the company’s current market capitalization, while the company’s business model limits ongoing costs and reduces dilution risk. The scale and capability of the operators involved enhances the probability of success, and combined with the company’s minimal capital requirements, creates a highly asymmetric risk-reward profile.
As an added bonus, an industry expert and successful entrepreneur, with directly applicable technical skills and personal experience, weighs in and shares their perspective. I speak with a number of experts in the process of evaluating ideas, and I’m pleased to share this expert’s analysis of this idea in the second half of the article.
