Only a handful of investors truly understand that one sector of the heavy oil market is the most profitable oil in all of North America - it's called cold flow heavy oil
Think of it as light heavy oil, thick and gooey enough that it needs a pump to get out of the ground, but no so thick that it needs expensive heating to flow - hence the name cold flow.
Now when I say that cold flow heavy oil is the most profitable, I mean that producers get more profit per barrel (the netback) than from other types of oil.
For every dollar producers put in the ground to get the oil, they get anywhere from $3-$7 back, sometimes up to $11 - compared to $1-$3 for light oil.
That's due to two factors: 1. The heavy oil is shallow so it doesn't cost much to get out, and 2. U.S. refineries love Canadian crude as Mexico and Venezuela heavy oil production declines, so heavy oil prices in Canada are now strong
And Canada has more of this oil than anyone else in the world.
The real opportunity comes from the fact that right now - at this very moment - only a few junior and intermediate producers focus on cold flow heavy oil.
That will soon change and as a result, investors will see a host of explosive new profit opportunities as this massive Canadian resource gets developed.
But make no mistake - the biggest, juiciest profits will come from those companies who are already in the cold flow heavy oil game.
GLTAL
IB