There’s one investment niche that has held strong for decades and is showing no signs of going away — but you have to do the legwork yourself sometimes.
In this episode of the Passive Investing Show, Ashley and J discuss oil investments with Grant Norwood of the Norwood Energy Corporation. Tune in and learn the ins and outs of investing in the oil and gas industry and what it takes to drill a field.
Here are some power takeaways from today’s conversation:
- Find opportunities yourself
- Take investments on a case-by-case basis
- Don’t hesitate to participate directly
- Find two people smarter than you
Episode Highlights:
[2:04] Norwood Energy Corp
Norwood Energy Corp began as a land-and-title storefront before shifting to oil and gas; land and titles are critical to the oil and gas industry. Norwood has two primary strategies: acquire and improve land or a diversified drilling plan.
[5:12] Maximizing Value and Output
Improving the value of an existing asset involves having the expertise and capitalizing on opportunities. But these opportunities won’t fall in your lap — Grant takes every phone call and does a lot of legwork to evaluate potential fields. You have to go out and do the work yourself.
[14:03] Strategizing Investments
Grant's expectations for investment are on a case-by-case basis. He holds some properties for a long time, but others require development. There are some risks in oil — price fluctuations, on-site concerns, geological problems — but ultimately, an oil investor will have to do a lot of direct participation.
[24:12] Timeframes and Cash Flow
Investing in oil has a varying hold timeframe. Norwood Energy Corp holds anywhere from five to twenty years. The length of a hold varies depending on the price of an oil barrel and a company’s financial strategy.
[31:31] Threats to the Industry
According to Grant, COVID is a significant threat to the oil and gas industry. Recessions aren’t a concern because people still have to travel. As of now, alternative energy only contributes 3% to the energy mix.
Notable Quotes from the Episode:
[07:51] "So many times buyers are private, equity-backed or whatever have you, and they want all the data provided to them, or they won't even give it the time of day or look around and try to find these themselves. So they miss out on all the good ones."
[11:17] "There are several different ways you can come up with a completely new concept. And you can back it up with science and data, and then get out there and try a new concept. And I mean, that's where legends are made, you know, you get out there and no one's tried it."
[18:33] “But if people have been drilling in that area, it's known that, say 3000 out of the 10,000 feet, you're drilling, you need to plan for some lost circulation. Well, if you know going into it, then you're not going to lose your well.”
Resources Mentioned:
Norwood Energy Corp: Website
Contact Grant Norwood: Company Website | LinkedIn | Blog | Email
