The lure of a big payday is usually what gets a new company off the ground. The reality of getting a new company off the ground, however, is that long hours and false starts will be needed to make that payday happen. How long it will take and how much profit will result is the question.
Bonanza Oil & Gas Inc., an oil and gas exploration and development company, works to discover and exploit oil and gas deposits primarily in Texas. The company currently holds 22.5% ownership in eight pre-discovery wells.
The company is a small operation looking for its first consistently producing wells. Operating as it finds opportunity and financing, it generates revenue on a fairly limited basis. This, however, is not to suggest that the company won’t find a large reserve of oil or gas in the near future. It has raised $4 million in financing over the past year and is putting it to good use at its recently acquired Plantation and Aclark well locations. Its existing well positions have been producing small but consistent amounts of oil since their addition to the company’s portfolio. What the company is really looking for is its first solid set of wells to come in.
The true nature of the oil and gas business is not generally what most investors think. The oil and gas game is a difficult one, where long months of work need to be completed before any sign of oil or gas is found. When it does arrive, however, the rewards can be great. From this perspective, being involved with a smaller company before it makes its first strike can actually be more profitable on a percentage basis then being an investor in an established smaller company.
Bonanza Oil and Gas is a new company on the scene and is making progress toward establishing itself in an ever-crowded market of new oil and gas companies. An investor that would like to experience the thrill and agony of being an oil explorer, without getting dirty, may be interested in Bonanza Oil & Gas.
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