Business plan for oil and gas trading pdf

I finally decided to write an article about the oil and gas business after a couple of requests from some of our readers; especially from Nigeria.

business plan for oil and gas trading pdf

Without using technical jargon to confuse you, this article will give you a basic understanding of how the oil and gas business works, the top hot-selling oil products in Africa, and some tips you need to succeed as a small business or individual entrepreneur.

According to a United Nations Reportwhen compared to other regions of the world, especially developing areas in Latin America, the Middle East and Asia, Africa has the lowest energy consumption per person.

Today, the situation is changing very rapidly. At a growth rate of 4. As long as the demand for more energy continues to grow on our continent, the oil and gas business will continue to boom and become more lucrative. We shall now look at a couple of reasons for the growing demand for energy in Africa. Africa has one of the fastest growing populations in the world with an annual population growth rate of nearly 3 per cent over the last 20 years.

The amount of energy consumed in cities is much higher than in rural areas. Due to the nature of city life and its higher level of physical and economic activities, people, companies and even the government spend more on energy to keep things running. With our current rate of urbanization at 38 percent, Africa now has more people living in cities and rural areas than India 30 percent.

Our continent is now as nearly urbanized as China which has a 45 percent urbanization rate. At the moment, up to 52 African cities have a population of more than one million people. Bythe number of cities with more than one million people will reach This outcome will lead to more energy consumption on our continent as the size and population of our cities grow. You would have heard that six of the ten fastest growing economies in the world are in Africa.

Factories will need energy to produce goods that boost the economy. People need to move around transportation to conduct business and involve in the actual trade and commerce that leads to economic growth.

Another interesting reflection of the growing African economy is its expanding middle class. At the moment, there are more than million people on the continent who fit into this category. They are more likely to use and spend more on kerosene or cooking gas in place of charcoal and firewood which are popular with low income earners. Some of these people may own their own cars and use private power generators for electricity.

Despite their disadvantages such as climate change, health problems etcfossil fuels like oil and gas remain very popular in developing regions like Africa because there are very few options or alternatives.Are you about starting a natural gas distribution business?

Okay, so we have considered all the requirements for starting a natural gas distribution business. It can be truly challenging starting any business, but one business which you can start with fewer challenges is the natural gas distribution business. A natural gas distribution business involves buying natural gas in wholesale from natural gas drilling and production companies and then distributing them to retailers.

A natural gas distribution business is profitable, and it is a very easy business to start despite the fact that it is capital intensive. So, if you have decided to start a natural gas distribution business, then you should ensure that you carry out thorough feasibility studies and market survey. Business plan is yet another very important business document that you should not take for granted when launching your own business. Below is a sample natural gas distribution company business plan template that can help you to successfully write your own with little or no hassle.

The natural gas distribution industry comprises of businesses that basically manage gas distribution systems consisting primarily of gas mains and meters that transport gas to end users. Other companies are gas marketers that buy gas directly from the well and sell it to a distribution system, while others still are gas brokers or agents that arrange for gas to be sold via distribution systems operated by other companies.

The Natural Gas Distribution industry has performed erratically over the past five years. Revenue declined significantly in in line with the shale gas boom, which resulted in a flood of domestic natural gas production. When combined with a shortage of pipeline infrastructure and export facilities, this triggered a collapse in natural gas prices. The economic significance of natural gas has grown over the past decade, with manufacturers and electricity utilities relying increasingly on natural gas as an energy source due to declining prices.

Over the five years tonatural gas production is projected to slow, while infrastructure investments will boost pipeline and export capacity.

The industry is responsible for the employment of over 85, people. Experts project the natural gas distribution industry to grow at a 3. It might interest you to know that no natural gas distribution company can boast of having a lion share of the available market in the United States. Please note that there are a number of barriers to entry into the Natural Gas Distribution industry.

A major barrier to entry is posed by the large sums of capital and considerable expertise required to successfully establish an enterprise. Regulatory requirements at both the federal and state level, requiring industry specific expertise and knowledge of industry structure can deter would-be participants.Also, energy sector volatility has risen sharply in recent years, ensuring strong trends that can produce consistent returns for short-term swing trades and long-term timing strategies.

In addition, not all energy-focused financial instruments are created equally, with a subset of these securities more likely to produce positive results. Crude oil moves through perceptions of supply and demandaffected by worldwide output, as well as global economic prosperity. Oversupply and shrinking demand encourage traders to sell crude oil markets to lower ground while rising demand and declining or flat production encourages traders to bid crude oil to higher ground.

Price action tends to build narrow trading ranges when crude oil reacts to mixed conditions, with sideways action often persisting for years at a time. Professional traders and hedgers dominate the energy futures marketswith industry players taking positions to offset physical exposure while hedge funds speculate on long- and short-term direction. The subsequent waves of greed and fear can intensify underlying trend momentumcontributing to historic climaxes and collapses that print exceptionally high volume.

WTI originates in the U.

business plan for oil and gas trading pdf

Permian Basin and other local sources while Brent comes from more than a dozen fields in the North Atlantic. These varieties contain different sulfur content and API gravity, with lower levels commonly called light sweet crude oil. The rise of U. This ban was removed in The majority of futures traders can focus exclusively on this contract and its many derivatives. It peaked late in the decade and began a torturous decline, dropping into the teens ahead of the new millennium.

As of Feb. However, it has a relatively high risk due to the 1, barrel contract unit and. The U. This security tracks WTI futures but is vulnerable to contango, due to discrepancies between front month and longer-dated contracts that reduce the size of price extensions.

Oil companies and sector funds offer diverse industry exposure, with production, exploration, and oil service operations presenting different trends and opportunities. While the majority of companies track general crude oil trends, they can diverge sharply for long periods. These counter-swings often occur when equity markets are trending sharply, with rallies or selloffs triggering cross-market correlation that promotes lockstep behavior between diverse sectors.

Some of the largest U. Reserve currencies offer an excellent way to take long-term crude oil exposure, with the economies of many nations leveraged closely to their energy resources. Bearish crude oil positions require buying these crosses while bullish positions require selling them short. Market players looking to trade crude oil futures and its numerous derivatives need to learn what moves the commodity, the nature of the prevailing crowd, the long-term price history, and physical variations between different grades.

For related reading, see: Introduction to Trading in Oil Futures. Federal Reserve Bank of St.

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Council on Foreign Relations. Foreign Policy.This free, printable business plan can help gas energy companies identify weaknesses and strengths within their corporations and create projected profit and loss charts. The Company strives to be an asset to its community as well as to its nation.

By providing a quality product on a national scale, the Company is fulfilling the needs of residents and businesses in need of its services. With adequate funding, [Company Name] will be able to expand its Company and continue to be a positive resource. Furthermore, [Company Name] will be able to build on its exposure through effective marketing and advertising.

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The owner of [Company Name] is [Name], who's been in the industry since All content is for informational purposes, and Savetz Publishing makes no claim as to accuracy, legality or suitability. The site owner shall not be held liable for any errors, omissions or for damages of any kind. Contact us. Privacy Policy. Subscribe to the Free Printable newsletter. No spam, ever! Subscribe Free! This template is easy to download and print.

Just choose a business plan template and download it. Collections of business forms are now available as convenient all-in-one downloads. Business Plans for Specific Industries.

Search all templates for:. We're always adding new printables, and would love to hear your suggestions. What are we missing? Downloads are subject to this site's term of use.

This template belongs to these categories: specific. The Company [Company Name] is a family owned Company that produces natural gas.The recipient of the Business Plan agrees by its receipt not to reproduce, duplicate, or reveal, in whole or in part, information presented herein without the written permission of the Company.

The Company and other sources provided the information contained in the Business Plan. It has been reviewed, approved, and released by the Company, which assumes responsibility for its contents.

Estimates and projections contained herein have been prepared by the management of the Company and involve significant elements of subjective judgment and analysis and are based on certain assumptions. Actual results may vary from estimates and projections, and these variations may be material. No representation or warranty, expressed or implied, is made as to the accuracy or completeness of the information contained in this overview, and nothing contained herein is, or shall be relied upon as, a promise or representation, whether as to the past or the future.

The Business Plan does not purport to contain all of the information that may be required to fully evaluate the Company for a potential business relationship, and any recipient thereof should conduct their own independent analysis and due diligence process. Initial production can begin within 3 months for immediate cash flow results. Business Plan 5. General Oil and Gas will identify and target potential acquisitions in the oil and gas sector.

General Oil and Gas will benefit from the option to purchase General Oil and Gas in whole or in part as one of its portfolio of investments. Key focus areas for its energy investments are domestic upstream businesses that are engaged in the exploration, acquisition, development and production of oil and natural gas reserves in Alberta, Canada. General Oil and Gas will primarily focus its efforts on acquiring oil and gas properties with proven developed and undeveloped reserves that are economically attractive with strong upside potential.

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Through its investments, General Oil and Gas plans to generate both current income and capital appreciation for its shareholders. General Oil and Gas is unique in that it will be a public company that focuses on making investments in good value assets. Business Plan 1. General Oil and Gas seeks to make engineering based, development oriented investments in the energy industry that are low risk and near the production stage.

General Oil and Gas will structure transactions to generate an appropriate total return for the risk undertaken. Initial production can begin in 3 to 4 months post financing for immediate cash flow. Management constantly examines current and old oil properties in Alberta, Canada with potential to return to oil recovery and production. To date, they have identified five high value properties with a value that has been supported in a report issued on January 31, by AJM Deloitte4.

business plan for oil and gas trading pdf

Alberta holds most of the oil and gas which extends from the Rocky Mountains to the Canadian Shield, and which contains one of the world's largest reserves of petroleum and natural gas. Canada produced Over the year, incrude oil exports increased Canada sends more than 95 percent of its oil exports to the United States, the bulk of which goes to Midwestern refineries for refining and processing.

The U. Sourcing more of our energy from a friendly, trusted and nearby neighbor will help reduce U. While the U.

Buoyed by strong crude prices, drilling for oil and gas in Western Canada have hit a five-year high in December as producers put in motion their winter action plans6. The number of rigs in the ground in the second week in January reached an 83 per cent utilization rate, a level for the beginning of January not seen since the heady days of when service companies were frantically trying to capture high natural gas and oil prices.

Statcan, Thursday, January 12, In the opinion of the Company, there is a wealth of high quality oil and gas projects that are underdeveloped and have been divested, making them available to observant acquisition parties. While tar sands have been all the news in Alberta, the past year has seen a return to drilling of conventional oil resources due to advances in technology, especially in horizontal drilling methods or EOR7. By re-assessing vintage properties in relation with new technical applications, production of these properties can resume profitably.Crude oil is one of the most actively traded commodities in the world, and its price affects the price of many other commodities, including gasoline and natural gas.

It remains a major source of energy for the world, despite increased interest in the renewable energy sector. Oil prices fluctuate on the faintest whisper of news regarding pricing, which makes it a favorite of swing and day traders looking for an edge. This volatile environment can provide some solid trading opportunities, whether your focus is on day trading futures or you are a longer-term trader. It can also provide great losses if you are on the wrong side of a price movement.

Crude is the raw material that is refined to produce gasoline, heating oil, diesel, jet fuel, and many other petrochemicals. It comes in many different grades, and the fundamentals are different since it is a raw product. Light sweet crude oil is the most popular grade of crude oil being traded because it is the easiest to distill into other products, and it is traded on the New York Mercantile Exchange NYMEX.

Brent Blend Crude is another grade of oil that is primarily traded in London and seeing increased interest. Russia, Saudi Arabia, and the United States are the world's three largest oil producers as of Brent is the most widely used benchmark for determining gasoline prices. It has a higher sulfur content and falls into the category of heavy, sour oil. The Dubai Mercantile Exchange offers futures for this crude. When crude oil is refined or processed, it takes about three barrels of oil to produce two barrels of unleaded gas and one barrel of heating oil.

This helps to put into perspective the production needs of crude, and why production and supply levels are watched so closely.

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The main reports for crude oil are found in the U. This report is released every Wednesday around 1 p. Trading crude can be confusing when you first get into it. Traders are also advised to understand the futures market. When you trade a futures contract, you must either buy or sell—call or put—the commodity by the expiration date at the stated price.

If you hold a call, the only way to avoid actually having to take physical delivery of 1, barrels of crude oil is to offset the trade before the expiration. Trading futures is not recommended for beginning investors.

When tracking price movement and making trades, remember that the price of unleaded gas and heating oil can influence the price of crude oil. Demand is generally highest during the summer and winter months, but for different reasons.It should be noted that there is no special software required to use these templates.

Oil and Gas Demand in Africa – A Booming Business Opportunity for Entrepreneurs

All business plans come in Microsoft Word and Microsoft Excel format. Each business plan features:. Oil Company, Inc. The Company was founded by John Doe.

As stated above, the Company intends to acquire land leases on properties known to have oil deposits. The business will then develop facilities on these properties with the intent to extract and distribute oil for sale onto the open market. The initial capital sought in this business plan will allow the business can acquire its first land lease while concurrently sourcing the equipment needed to operate a moderate sized oil extraction operation.

It should be noted that at all times, the business will comply with all applicable federal, state, and local laws including OSHA in order to ensure the safety of all employees working for the Oil Company. The third section of the business plan will further describe the operations conducted by the Oil Company. At this time, Mr. Doe has more than 10 years of exploration experience.

Through his expertise, he will be able to bring the operations of the business to profitability within its first year of operations. Doe expects a strong rate of growth at the start of operations.

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Below are the expected financials over the next three years. The Founder expects that the business will aggressively expand during the first three years of operation. Additionally, the Company may seek to acquire additional land leases on proven grounds for oil extraction. The business is registered as a for profit corporation in the State of New York. Below is a breakdown of how these funds will be used:. The investor s will receive a seat on the board of directors and a regular stream of dividends starting in the first year of operations.

After the requisite capital is raised, Mr. The Management has discussed and planned for three possible exit strategies. The first strategy would be to sell the Company to a larger entity at a significant premium.

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Since, the oil extraction industry maintains a moderately low risk profile once the business is established; the Management feels that the Company could be sold for ten to fifteen times earnings.

After a detailed analysis, it was found that comparable companies sell for ten to fifteen times earnings on the open market. However, taking a company public involves significant legal red tape. The last exit scenario would involve the use of a private placement memorandum to raise additional capital from private sources.

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