My 14 February 2014 wire began by warning Steer clear of Red Fork Energy

John Robertson

PortfolioDirect

My 14 February 2014 wire began by warning Steer clear of Red Fork Energy. Its financial model seemed doomed to failure. Now, the company has flagged its assets are for sale for the very reasons referred to in the earlier wire. The same risk (and warning) applies to any of the companies buying into extremely short life US oil wells. The US energy scene is not as friendly as many had expected. News broke last week that the estimate of recoverable oil from the Monterey shale formation in California will be cut by 96% when the US Energy Information Administration updates its 2011 estimate, based on the analysis of an external consultant, in June. On a closer look, existing technology appears unable to cope with a far more complicated geological setting than the industry had been promoting.


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John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...

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