As if an investor needed to be told, supply and demand generally determines price and investment. Many may dispute this particular economic theory, but as in any natural equation, balance will be found. Oil and gas pricing, demand and supply are no different. Balance will be found regardless of how companies and governments might try to manipulate the process. A company that can be flexible enough to find this balance more quickly is the company that will profit most handsomely. The only trick to the process is how to find a balance that makes the most profit.
Capital City Energy Group Inc. is a diversified oil and gas company working in most aspects of the oil and gas exploration/production/delivery markets. The company operates on a triad business model oriented toward; energy fund management, oil well services and fractional ownership of oil and gas wells throughout North America.
For the most part, the company is well positioned in almost every aspect of the oil and gas markets. It owns well shares in almost every major oil and gas region of North America, manages energy funds for customers interested in energy and seeks out positions or ownership in oil and gas services companies. It is, however, the company’s fractional ownership in oil and gas wells across North America that generate the bulk of the company’s revenue.
Currently, the company owns a percentage of over 200 oil and gas wells located at all major oil and gas producing regions. As such, the company is exposed to the swings that commodity oil and gas prices experience. It does, however, balance these swings with a solid position in ownership, or part ownership, in oil and gas well services companies through its Eastern Well Services subsidiary. Generally, these types of companies – services companies – run with the same relative profit potential as oil and gas production but are somewhat less exposed to swings in commodity prices owing to the finite number of oil and gas production equipment and availability of crews.
Regardless of exposure, the company is currently seeking additional energy services companies (or shares) to add to its portfolio. How commodity pricing of oil and gas affects this effort is unknown, although it does point out the exposure risks, both up and down, that energy companies have to deal with – and their ability to balance them. Finding this balance is the key element to profitability in a rather volatile energy market. To this end, the company has found a balance with ownership in pipelines and other “to market” activities.
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