"If my interest is a depleting asset, why do you want it?"
Many people ask Trinity Bay Energy this question.
Many of our clients have interests in just a few wells, or in some cases, a single well. If one of those wells stops producing, the revenue will go down too - in some cases, to zero.
Trinity Bay Energy owns oil and gas interests in wells across the United States. Therefore, we have a broad asset base, but we are still trying to diversify even more. This diversification
eliminates a lot of the risks associated with owning oil and gas interests. It is the same thing as investing in stock in one company versus owning stock in many companies through a mutual fund. The
mutual fund helps the investor eliminate volatility and the risks associated with the stock market.
Simply, this is our business. We assume the risks and hope to make a fair profit some day in the future.
"Doesn't the value of my property always go up?"
It would be great if it did.
However, your property is probably worth more today that it will be in the future, mainly due to the decline rate of production associated with your well. The decline rate is measured by the volume
of oil or gas coming out of the ground. This quantity usually reduces over time as the operator produces the properties. As such, there is less and less oil or gas in the ground that can be
produced and sold. At some point, it will be uneconomical for the operator to continue producing from that property.
The oil or gas that is produced on your property will eventually run out. You may have noticed a reduction on your more recent checks if you compare them to your older checks. When we
evaluate the value of your interests, we do a technical analysis to assess the decline of production to determine the current value of the property and how much oil or gas may be
left in the wells.
If you have any other questions, please call us toll free at 1.877.320.3443.