DRILLING DEEPER TO DISCOVER PROFITS | ISSUE 51, APRIL 2018

OXFORD RESOURCE

Dear Member,

I’ve already realized that if you live long enough, you get to see everything come full circle.

Though this is a concept energy and resource investors know better than anyone.

The sectors are cyclical. They’re prone to booms and busts. And all we need to do is wait... eventually, it all comes full circle.

Take crude for example. The “Black Gold Rush” of the 1850s helped propel America to superpower status. We ruled the industry. And by 1880, the U.S. controlled 85% of the world’s crude production and refining. This is why John D. Rockefeller’s Standard Oil eventually needed dismantling.

During this time, the U.S. was an exporter of oil as countries like resource-barren Japan were dependent on U.S. crude imports from 1913 through the 1930s.

This was key, as when World War II started, the U.S. controlled 60% of the world’s oil production... Then in the summer of 1941, the U.S. ended oil exports to Japan. A few months later, Japan retaliated by bombing Pearl Harbor, hoping to destroy the U.S. Navy’s 4 million barrels of oil stored on the island.

When U.S. soldiers came back from the war, our relationship with oil began to change. By the 1950s, Americans had fallen madly in love with the automobile. Highways started snaking their way across the U.S. And we couldn’t keep up with our own thirst for crude.

Over the two decades that followed, American oil imports soared 500% to more than a third of U.S. demand.

This dependence on foreign sources continued to increase until the mid-2000s. It shaped energy policy and how most of us viewed our place in the global crude markets. But for the past decade, we’ve been in the era of “unconventional oil.”

It’s a pivotal moment in history. We’re seeing everything come full circle for the U.S.

The company I’m going to talk about today is part of this unconventional revolution that’s upsetting the structure of the global oil market most of us have known our entire lives...

The Oxford Club Matthew Carr Emerging Trends Strategist

Eric Fry Macro Strategist

David Fessler Energy and Infrastructure Strategist

Alexander Green Chief Investment Strategist

Matthew Benjamin Editorial Director

Patrick Little Managing Editor

Anne Mathews Managing Copy Editor

Alison Kassimir Art Director

Chelsea Centineo Graphic Designer

James Boxley Cooke Honorary Chairman

Julia Guth CEO & Executive Director

Nathan Hurd Executive Vice President

MATTHEW CARR

The New King of “Unconventional Oil” And This Independent Company’s Revenue Is Set to Surge 200%by Matthew Carr, Emerging Trends Strategist, The Oxford Club

2profit from the oil boom

U.S. Oil Goes Back to the Future It’s a strange time for many of us. The world’s much different from the one we knew.

American imports of crude have declined rapidly for 15 years. Meanwhile, U.S. exports have soared.

It’s the result of the “unconventional era” of oil – that U.S. shale revolution that’s reshuffled the global oil hierarchy.

No longer is Saudi Arabia or even Russia the top dog... America is.

We’re once again a net exporter of petroleum products. We’re even inching toward self-sufficiency.

Plus, as OPEC, Russia and their allies continue to cut ouput, global oil prices are dictated once again by U.S. producers.

The U.S. Now Doubly Dominant in Oil For a lot of us, this is uncharted territory.

For decades, the U.S. was the top customer – to the benefit of every other oil producer in the world. But now America is in position to take the mantle as top supplier.

Take a moment to realize that over the next three years, U.S. crude production will meet 80% of global demand growth.

And in the next five years, production specifically from the Permian Basin is projected to double.

In fact, overall U.S. crude production will tip past 12 million barrels per day (bpd).

As OPEC’s influence continues to erode, global oil demand will chug higher. By 2023, worldwide consumption of crude will top 104 million bpd.

American producers will continue to gain the upper hand as OPEC’s stranglehold weakens.

This is the perfect environment for today’s Fortune Hunter recommendation...

Triple-Digit Growth in the Heart of the Delaware Basin In the last five years, the U.S. oil patch has gone from boom to bust... It’s rebuilding once again.

In 2014, OPEC launched a campaign to drive U.S. oil producers out of business.

The cartel flooded global markets to collapse the price of crude and stab at the heart of America’s newfound energy wealth.

As energy and resource investors, we know all too well what transpired. Bankruptcies were the new gushers in the oil field.

In 2015, oil companies filing for bankruptcy protection shot up 379%. In 2016, the oil patch accounted for 41% of all public company bankruptcies.

Corporations worth tens of billions of dollars folded. And hundreds of billions of projects around the world were shelved indefinitely.

Scars of the collapse are still visible. We’re in our second year of recovery. Some energy investors remain skeptical. But we’re seeing a transfusion of new blood.

In 2014, when crude prices were at their peak, 20 oil companies worth a combined $11.7 billion filed for initial public offerings (IPOs).

During the collapse of crude and in the years since, only 21 total oil companies worth a combined $9.8 billion have gone public.

So there’s still a long way to go before the exploration and production (E&P) sector gets back to where it was pre-bust.

But the Fortune Hunter I’m sharing with you is one of that new breed that’s looking to capitalize on a revitalized U.S. oil patch.

U.S. Crude Production Growth to Meet Global Demand Growth

Over the next three years, U.S. production growth will meet 80% of global demand growth.

43210

Million barrels per day

Source: International Energy Agency

U.S. Crude Production Growth 2018-2020

Global Oil Demand Growth 2018-2020

3profit from the oil boom

And revenue for the company is expected to soar.

Jagged Peak Energy (NYSE: JAG) was one of those few U.S. oil companies to IPO in the last couple of years.

The young, independent E&P company is positioned at the heart of the Delaware Basin – a valuable unconventional sub-basin of the Permian that includes the attractive Wolfcamp area.

The driller is sitting on more than 75,000 acres, the majority of which are contiguous. More than 80% of Jagged Peak’s output is oil.

As CEO Joseph N. Jaggers stated, “Simply put, we have the oiliest asset in the Basin.”

And based on its current pace of development, Jagged Peak has 40 years’ worth of primo drilling spots to tap.

Between its current drilling locations and new ones pending development, Jagged Peak is about to take off.

Jagged About to Surge on 307% Revenue GrowthIn the third quarter of 2017, daily output increased to 19.2 million barrels of oil equivalent (boe) per day. That’s a more than 200% increase over 2016’s output.

At the same time, lease operating expenses fell 25% to $2.94 per boe.

And total cash operating expenses declined 10% to $9.70 per boe.

Now, because of the attractive price environment, Jagged Peak accelerated its drilling efforts to close out 2017.

It is expected to report completion of approximately 16 wells in the fourth quarter of 2017.

And the projections are attractive for this newly public E&P company.

For the fourth quarter of 2017, revenue is expected to shoot 307% higher year over year...

For the full-year 2017, year-over-year revenue is expected to be up more than 246%.

And in the first quarter of 2018, it’s anticipated that momentum will continue.

First quarter revenue is forecast to increase more than 200% year over year to $118.5 million.

Revenue is expected to more than double in the year ahead.

It’s all thanks to the U.S. rising to dominance in the era of “unconventional oil.”

Jagged Peak Energy’s Identified Drilling Locations by Formation

Wolfcamp A Wolfcamp B 3rd Bone Spring

2nd Bone Spring

CurrentLocations

719450

788 133 2,090

JAG Quarterly Revenue

Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18Source: Bloomberg

■ = Estimates

$120

$100

$80

$60

$40

$20

Millions

4profit from the oil boom

Return of the Oil King: Profit From American Energy Coming Full CircleAmerica has regained the crown it lost for so many decades. And the new breed of Permian producers – like Jagged Peak – are the driving force behind the country’s push not just to achieve oil independence... but to become the No. 1 supplier of crude to the world.

We’ve come full circle. There are many who think that expecting crude to rise just 20% from where it’s currently trading is overly euphoric. But the oil bull is far from dead. And that rise in crude will only help Jagged Peak and the rest of America’s oil producers...

I’ve stated here before that I believe oil will hit at least $75 per barrel this year. I’ve even been forced to defend that call...

But as you’ll see later in this issue, my colleague Eric Fry thinks it’s not out of the question to see $100 oil in 2018.

Before you get to that, my colleague David Fessler has another Permian Basin oil producer that he’s eager to recommend... See his article on the next page...

Action to Take: Buy Jagged Peak Energy (NYSE: JAG) at market. Use a 25% trailing stop to protect your principal and your profits. This is a perfect company for our Fortune Hunters Portfolio. n

The Oxford Club’s Private Wealth Seminar

The Fairmont Chateau Whistler British Columbia, Canada July 23-24

You’re cordially invited to join us at our 2018 Private Wealth Seminar July 23-24 at the beautiful Fairmont Chateau Whistler in British Columbia, Canada.

This is a wonderful opportunity for you to get up close to some of the world’s most accomplished investing minds... discover their best ideas for generating serious money in uncertain markets... and mingle with like-minded Members, forging profitable, lifelong friendships.

You’ll hear from your favorite Oxford Club editors, including Emerging Trends Strategist Matthew Carr and Macro Strategist Eric Fry, as well as our guest speaker from Sprott U.S. Holdings, Chairman Rick Rule.

We’ve spent months preparing this exclusive event for you. And while we’re still putting together some of the final touches, we don’t want to keep you waiting. Registration for our July meeting is now open.

Simply click here for more information.

P.S. Want to hear what Energy and Infrastructure Strategist David Fessler has to say? Join him at our fall Private Wealth Seminar this coming October 1-2, on beautiful Kiawah Island, South Carolina. For more information, click here.

5

My friend Ray and I worked together in the semiconductor industry for 25 years. He is one of my best friends.

We’ve both managed our own investments for most of our lives. And we both joined The Oxford Club about 15 years ago and became Chairman’s Circle Members.

When Ray retired, he and his wife sold their house in Phoenix and moved to Texas to be closer to children and grandchildren. Where they live is not far from Midland, which is ground zero for oil activity in the Permian Basin.

The Permian has become one of the most important oil basins in the world. It’s second in size only to the giant Ghawar Field in Saudi Arabia.

Ray is amazed every time he passes through Midland. “Help Wanted” signs are everywhere. The number of people working in and around Midland has skyrocketed, from 65,800 a decade ago to more than 90,200 as of December 2017.

It’s all because the Permian is the hottest shale oil field in the world. It’s the reason for the U.S.’s meteoric rise in crude production.

And the company I’m going to show you today is one of the few that’s primed for a spectacular performance.

The New Oil Behemoth Is in “Saudi Texas” The Permian is like a stack of syrup-soaked pancakes. But instead of syrup, each layer is soaked with oil and gas.

It’s absolutely massive in terms of land area. The Permian covers 75,000 square miles in Texas and New Mexico...

That’s more than 48 million acres. There is so much oil in the area that the U.S. Geological Survey (USGS) continues to explore it to this day.

In November 2016, the USGS announced it had discovered that the Wolfcamp shale formation contains 1.6 billion barrels of natural gas liquids, 16 trillion cubic feet of natural gas and 20 billion barrels of oil.

That’s worth a cool $1.2 trillion at today’s West Texas Intermediate (WTI) price of $60 per barrel.

And Wolfcamp is just one of the six to eight oil- and gas-drenched layers in the Permian. Advances in horizontal drilling and fracking technology mean drillers can reach oil in multiple layers from the same wellhead.

Current output from the Permian is a record 2.8

million barrels per day (bpd), making it the top oil-producing shale formation in the world.

There are more rigs in the Permian Basin than in all other U.S. shale basins combined. This all explains why the Permian has earned the name “Saudi Texas.”

Right now the Permian has 434 rigs operating – 126 more than were drilling there this time last year.

More rigs are coming online every day. The demand for high-specification efficient drill rigs is seemingly endless in the Permian.

Several producers have taken notice...

Pioneer Natural Resources (NYSE: PXD) – which has been in the Oxford Resource Explorer Fortune Hunters Portfolio since last August – said it’s selling all of its non-Permian oil and gas acreage and infrastructure, and focusing 100% of its assets on the Permian, which it calls a “Super Basin.”

Move Over, OPECThis Low-Cost Producer Is Making Hay in “Saudi Texas” by David Fessler, Energy and Infrastructure Strategist, The Oxford Club

profit from the oil boom

DAVID FESSLER

“Current output from the Permian is a record 2.8 million

bpd, making it the top oil- producing shale formation in

the world.”

6profit from the oil boom

Two Calgary-based drilling companies are also moving rigs to the Permian. Trinidad Drilling is moving eight of its high-tech rigs from Saudi Arabia and Canada to Permian well pads.

But drilling in the Permian isn’t new. Drillers have been sinking wells there for nearly a century. In fact, since the 1920s, it’s yielded more than 39 billion barrels of oil. Most of that came from conventional vertical wells.

Crude output from the Permian steadily declined from the 1970s through the early 2000s. The Permian was nearly left for dead.

As the Permian declined, overall U.S. production fell below 6 million bpd. It stayed at that level through 2012.

Then American ingenuity kicked in. American engineers took hydraulic fracking and horizontal drilling to new levels. It was like a shot of adrenaline to the downtrodden oil industry. The Permian Basin was given new life.

There are an estimated 70 billion barrels of technically recoverable crude still there. That’s more than twice the amount of all of the crude pumped from the Permian in the last 100 years. And that’s the stuff that today’s horizontal drillers and frackers are targeting.

By 2023, Permian crude production is expected to double from today’s level.

Over the next three years, the Permian, along with Canada, Brazil and Norway, will supply all of the expected additional demand for crude.

Permian exploration and production (E&P) companies could be drilling there for decades to come. Some analysts regard the Permian as the world’s largest untapped oil field.

Goldman Sachs believes Brent crude could reach $82.50 per barrel by July, which means WTI would likely reach $75 per barrel.

The company I’m adding to the Oxford Resource Explorer Fortune Hunters Portfolio is perfectly positioned for what’s coming...

The First Great Energy Opportunity of the 21st Century in the Heart of Texas From about the 1970s through the early 2000s, Exxon, Chevron and other “Big Oil” companies were searching the world’s oceans for the next big discovery.

A few American homegrown upstarts were instead looking right under their terrestrial feet. And they were focused on America’s mammoth shale oil basins.

EOG Resources Inc. (NYSE: EOG) was one such company... and these days it’s seizing an opportunity in the Permian.

EOG spun off from the notorious Enron Corporation back in 1999 – long before Enron was making news for all the wrong reasons...

In 2008, EOG was the leading E&P company that discovered and developed the Eagle Ford shale basin in southern Texas.

EOG is now the region’s biggest producer. It has brought down its cost per well from $6.1 million in 2014 to $4.5 million in 2017. It has a target cost of $4.3 million.

EOG’s first-year average well production has nearly doubled in the last four years. It’s jumped from 140,000 bpd to an estimated 272,000 bpd in 2018.

One of the best ways to see how EOG stands out from the rest is to consider lifting costs...

Saudi Arabia has the lowest lifting cost of any country, at $8.98 per barrel of oil equivalent (boe).

Meanwhile, EOG’s average lifting cost in the middle of last year was about $7 per boe.

That’s significantly lower than the U.S. shale average –

Average Cash Cost per Barrel of Oil Equivalent in 2016

$50$40$30$20$10$0

Source: Rystad Energy and The Wall Street Journal

U.K.Brazil

NigeriaVenezuela

Canada U.S. Shale

NorwayU.S. Non-Shale

IndonesiaRussia

IraqIran

Saudi Arabia

[FIRST LOOK]: “V Score” Accurately Predicting Stock Run-Ups

Did you know there’s a new stock scoring system called the “V Score” that’s accurately predicting enormous stock jumps?

Historical analysis proves it would’ve pinpointed a 1,063% gain on Tesoro Corp... a 1,941% gain on Alaska Air... and an exceptional 2,350% gain on Western Digital (among hundreds of other eye-popping examples).

Today it’s projecting a new play could launch 4,055% within the year.

Don’t miss out on the details here.

7profit from the oil boom

which includes most of EOG’s peers. In fact, EOG’s cost is lower than the average of every country in the world.

Making Hay in the Permian The Delaware Basin is one area of the vast Permian Basin. The Delaware Basin itself has eight separate zones that contain shale oil.

One of them is the First Bone Spring. In 2017, EOG’s production from First Bone Spring wells increased 80% year over year.

EOG also reduced the cost of well completions by $800,000 per well. By the end of 2017, EOG was producing more than 100,000 bpd from the Delaware Basin, most of which were from First Bone Spring wells.

It’s planning to drill a lot more wells there, too. So far, EOG has identified 1,240 premium drilling locations.

In 2018, EOG expects to complete 690 wells, a sizable jump from the 536 new wells it created last year.

In the grand scheme of things, EOG is really just starting to tap the First Bone Spring formation...

When the fleet is finally tapped out years from now, EOG will be able to drill the Second and Third Bone Spring layers.

There are four stacked layers elsewhere in the Delaware Basin as well. And EOG has 416,000 net acres to drill on there. It’s no wonder EOG is focusing so much of its capital on its Delaware Basin acreage.

EOG had a big year in 2017. The company grew crude production by 19%, adding 2,000 wells to its inventory. It now has about 8,000 undrilled locations, which are good for more than 10 years of drilling.

In 2018, EOG expects to grow its crude production by 16% to 20% and to increase its dividend by 10%.

In 2016, EOG’s average resource potential per well was 625,000 boe.

By February 2018, EOG’s average resource potential per well had jumped to 900,000 boe.

Over the next few years, EOG should outperform nearly every one of its peers in the E&P sector.

That’s why I’m adding it to the Oxford Resource Explorer Fortune Hunters Portfolio.

Action to Take: Buy EOG Resources Inc. (NYSE: EOG) at market, and add it to the Fortune Hunters Portfolio. Use a 25% trailing stop to protect your principal and your profits. n

EV Revolution to Drive Oil to $10 a Barrel,” a recent financial news headline declared. That prediction may come to pass, but the oil price is likely to hit $100 first.

A stealth bull market in crude is underway... and it probably has a lot further to go.

Admittedly, a triple-digit oil price is certainly not in any mainstream forecast. Most analysts in the energy sector are expecting the price of oil to do a whole lot of nothing over the next few months. According to a recent Reuters poll of 34 analysts and economists, crude oil will hang around $58 per barrel this year.

These oil skeptics have plenty of company within the ranks of professional investors. A Bloomberg survey of energy analysts and traders shows that bullish sentiment for crude oil has fallen close to its lowest level of the last three years (based on an eight-week rolling average). The survey’s latest reading is down to 27% – half of what it was last summer.

Clearly most folks expect the oil price to favor the downside over the next few months.

But I believe the death of oil is greatly exaggerated... and I expect its price to deliver some upside surprises over the

next few months. At least that’s what several data points from the oil sector are indicating.

Here in the U.S., for example, crude oil supplies have been falling sharply for months. The chart below shows the level of U.S. crude oil inventories, expressed as days’ worth of U.S. consumption. One year ago, this reading topped 27 days of consumption – the highest reading of the last three decades.

But at the start of this year, that reading dropped below 21 days, which is lower than the average level of year-end inventories during the last five years. In other words, the U.S. is no longer swimming in seas of excess crude oil.

Globally, a similar trend is underway. Rising demand for oil is sopping up supply. In fact, global crude demand recently surpassed global crude production for the first time since 2013. That’s a very favorable omen for oil prices.

The chart on the next page shows global oil demand, expressed as a percentage above or below global oil production. In early 2015, global demand lagged global production by about 1.5%. Today, however, demand is running about 0.7% above production.

A nearly identical reversal took place in 2004, and the oil price soared over the ensuing four years. History is unlikely to repeat itself in the exact same way this time around. But the current episode in the crude market may at least mimic the 2004-2008 episode.

8profit from the oil boom

Why $100 Oil in 2018 Is Not a Fantasyby Eric Fry, Macro Strategist, The Oxford Club

No Love for CrudeA Bloomberg survey of energy analysts and traders

shows bullish sentiment toward crude oil (based on an eight-week average reading) is near a three-year low.

60%

50%

40%

30%

20%

Bullish sentiment

2015 2016 2017 2018

A Surprising DrawdownU.S. crude inventories expressed as a day’s worth of demand have fallen below the five-year average of

year-end crude inventory

■ = U.S. crude oil inventory■ = Five-year average of year-end crude inventory

27252321191715

Days’ worth of demand

2011 2012 2013 2014 2015 2016 2017

ERIC FRY

“

9profit from the oil boom

The futures markets for crude oil are also indicating that demand is robust. The pricing structure of crude futures is in what traders call “backwardation.”

The typical pricing in crude futures is called “contango.” That’s when the closest-dated future is the cheapest and the most distant future is the most expensive.

But when contango pricing flip-flops, or goes backward, the market is in backwardation.

This relatively rare phenomenon is a sign that buyers want their oil right now – not six or nine months from now. Not surprisingly, therefore, periods of backwardation tend to coincide with periods of rising crude prices. And that exact situation is unfolding at this moment.

Now let’s throw one more bullish factor into the mix: global economic growth. Most readings of global GDP are showing fairly strong growth.

According to the International Monetary Fund (IMF), world GDP growth topped 3.7% last year... and is on track to grow about 3.9% this year and next.

A growing world economy means rising demand for crude oil. In very rough terms, based on GDP and crude oil data from the last 10 years, every 1% of additional GDP growth produces about 0.5% demand growth for crude oil.

So if we were to use this back-of-the-envelope relationship between GDP and crude demand and then apply it to the IMF’s GDP growth projections for this

year and next, we’d find global demand for crude could grow from 100 million barrels per day (bpd) today to nearly 104 million bpd by the end of 2019.

That level of demand would be nearly 5 million bpd above the highest annual production level the world’s oil producers have ever achieved. For additional perspective, 5 million bpd is greater than total U.S. shale oil production.

Admittedly, none of these numbers prove that the oil price must move higher; they simply highlight the possibility that it will.

Neat and tidy projections of current supply-demand trends sometimes become very messy and different in the real world. One single variable could throw off the entire projection.

For example, the “EV Revolution” is a variable that could wield a large negative impact on the price of oil. Many market observers believe EVs, or electric vehicles, will become the new normal and, therefore, will erode demand for crude oil very quickly.

After all, more than half of every barrel of oil becomes fuel for an internal combustion engine vehicle. So it makes sense that EVs would reduce net demand for crude... eventually. But that day is not likely to arrive anytime soon.

Even though EVs will capture a growing share of the global auto market, the total auto market will continue to grow larger.

continued on Page 11

Demand Leads PriceThe price of crude tends to follow the trend of world oil demand,

expressed as a percentage above or below world oil supply.

■ = Crude Oil Price per Barrel ■ = Demand Relative to Supply

2.5%

1.0%

-0.5%

-2.0%

$160$140$120$100$80$60$40$20

World oil demand above or below world oil supplyPrice of crude (per barrel)

2004 2006 2008 2010 2012 2014 2016

For most people, conversations about the weather are about as trite as they come.

“Some weather we’re having, huh?” is a cringeworthy opener, a desperate gasp to fill dead air.

But for energy and commodity investors, the weather is everything.

A late-season storm can mean so much more than just the annoyance of closed schools or the bewildering raid on milk and bread at the grocery store before the first snowflake falls.

For us, weather can translate into soaring profits...

In its fourth quarter earnings release, Raven Industries (Nasdaq: RAVN) reported revenue increased 39% to $95.8 million.

Every one of the company’s divisions reported double-digit sales growth. But it was Raven’s Engineered Films segment that was the real breadwinner, with revenue increasing more than 60%.

As I’ve written previously, this segment’s hurricane recovery films are essential to hurricane relief efforts. So the busy 2017 U.S. hurricane season provided a big boost in sales.

For the full year, Raven’s revenue increased 36% to $377.3 million...

And yet, even though earnings per share increased 92%, the company fell short of Wall Street’s expectations.

Also, tax reform legislation – which boosted many companies in the industry – had a negligible impact on Raven.

Nonetheless, Raven is bullish on 2019... and so are we.

But the weather’s impact on our portfolio didn’t stop there.

Over the past year, U.S. crude stocks have fallen by nearly 100 million barrels. And they’re now in the middle of the range we’ve seen over the past five years.

This isn’t something unique to the U.S.

It’s happening around the globe.

And better yet, this is what’s helping to support the rise in crude prices.

Worldwide crude demand is increasing as OPEC, Russia, et al. are cutting production. And in 2017, global inventories were gutted following the Pernis refinery fire in Europe and the U.S. hurricane season.

At the same time, to meet global demand, U.S. oil output soared to more than 10 million barrels per day in the final two months of 2017.

Some 93% of U.S. growth came from the Permian Basin.

All of this is great news for our position Pioneer Natural Resources (NYSE: PXD). Pioneer is the largest player in the Permian, as well as the largest exporter of U.S. crude.

Over the next five years, global oil demand will chug higher. By 2023, worldwide consumption of crude will top 104 million barrels per day.

Thirst for liquefied natural gas (LNG) is also surging. At the center of both is China.

This export situation is a boon not only for Pioneer but also for Cheniere Energy (NYSE: LNG) – the largest U.S. exporter of LNG.

In February, Cheniere signed a 25-year supply contract with China National Petroleum Corp. China is the third-largest consumer of U.S. LNG, behind Mexico and South Korea.

But China expects to be the world’s largest importer of LNG by 2030.

China is also the driving force behind our shares of Fourth Industrial Revolution (4IR) heavy machinery company Komatsu (OTC: KMTUY).

Komatsu’s sales in China doubled in 2017.

And over the next year, earnings for Komatsu are expected to rise more than 70%.

We also can’t ignore the fact that Komatsu’s home country of Japan has experienced eight consecutive

Oxford Resource Explorer:by Matthew Carr

1010portfolio review

PORTFOLIO REVIEW

11portfolio review

quarters of growth – its longest streak in 28 years.

Over the past six months, shares of 4IR robotics manufacturer ABB (NYSE: ABB) have trailed the broader machinery-electrical industry.

But I believe we could see momentum start to shift into high gear. As we’ve seen with Komatsu and our energy exporters, Asia’s demand for robots should pick up.

And ABB recently partnered with Kawasaki Heavy Industries to share knowledge and tap this market.

But energy and machinery companies aren’t the only exporters in our portfolios... We recently added two exporters in the burgeoning global marijuana market: Canopy Growth Corp. (TSX: WEED; OTC: TWMJF) and AusCann (OTC: ACNNF).

I think Canopy very well could be the second pure marijuana play to be listed on a major U.S. exchange... most likely the Nasdaq.

Canopy CEO Bruce Linton recently said that the amount of institutional interest the company has received following the Constellation deal last year has skyrocketed.

And that deal is extremely important for another reason...

Linton recently said that Canopy had planned to file an application to get listed on the Nasdaq in October of last year.

When Constellation took a 9.9% stake in the company, the plans were shelved for a bit. But Linton said that is something Canopy is going to pursue, in due course... Though he didn’t give a time frame.

When the Canopy CEO spoke about this, shares jumped. We already have a double-digit gain on our Canopy shares. And I think when – not if – shares get listed on the Nasdaq, they’ll jump again.

Our shares of Kadant (NYSE: KAI) are back above the $100 level. And we’re currently sitting on a more than 30% gain. The company also just announced it increased its quarterly dividend to $0.22 per share.

In March, the price of cobalt gained more than 8% in less than two weeks.

And over the past year, the price of cobalt has gone up more than 70%. Our shares of the VanEck Vectors Rare Earth and Strategic Metals ETF (NYSE: REMX) are up single digits at the moment. But they should start roaring higher as the prices for cobalt and rare earths take off this year.

As we can see, the weather can lead to big profits for our plays. And though a couple of our positions face some headwinds, they’re more than ready to weather any storm ahead... n

Why $100 Oil in 2018... continued from Page 9

That means the number of gas-powered automobiles on the road will continue to increase for several more years. In fact, the International Energy Agency (IEA) predicts oil demand from cars will remain above today’s levels until 2040.

Other prognosticators believe oil demand from cars will peak in 2030 or even earlier. But all of these forecasts share one important detail: Demand for oil from the auto sector will rise much higher – before sliding lower.

In other words, the path toward falling oil demand must first climb a peak.

Another reason crude oil demand may remain stronger

for longer is that air travel is booming. Currently, air travel consumes about 6 million bpd of crude oil supplies. But if the air travel market continues to grow as rapidly as both Boeing and Airbus are predicting, it will boost oil demand by nearly 1 million bpd over the next three years.

Clearly the oil market possesses plenty of potential to deliver upside surprises.

Slowly but surely global demand for crude has overtaken supply. And demand growth is showing no signs of slackening. That’s why the price of oil has been moving higher... and why it may climb all the way to $100 a barrel by the end of this year. n

OXFORD RESOURCE EXPLORER PORTFOLIOS

ISSUE OF REC. REC. PRICE CURRENT PRICE RATING TRAILING

STOPTOTAL GAINS EDITOR

FOUNDATION PORTFOLIO High-yielding and stable blue chips and MLPs that get resources to consumers and refiners

Aecom (NYSE: ACM) Mar-18 $34.99 $36.09 Buy $27.89 3.1% David Fessler

CatchMark Timber Trust Inc. (NYSE: CTT) Feb-18 $13.07 $12.53 Buy $10.23 -3.1% David Fessler

Kadant (NYSE: KAI) Jun-17 $76.85 $97.90 Buy $85.02 28.2% Matthew Carr

Komatsu (OTC: KMTUY) Jun-17 $24.59 $33.98 Buy $30.27 40.5% Matthew Carr

Martin Marietta Materials Inc. (NYSE: MLM) Jan-17 $224.15 $201.71 Buy $179.68 -9.0% David Fessler

TransMontaigne Partners L.P. (NYSE: TLP) Aug-16 $41.04 $35.74 Buy $31.52 -2.2% David Fessler

TransCanada Corporation (NYSE: TRP) May-16 $40.60 $40.91 Buy $35.52 8.7% David Fessler

FORTUNE HUNTERS PORTFOLIO Midcap to large cap companies that use new technologies to get resources out of the ground

Jagged Peak Energy (NYSE: JAG) Apr-18 New New Buy 25% TS New Matthew Carr

EOG Resources Inc. (NYSE: EOG) Apr-18 New New Buy 25% TS New David Fessler

Sibanye-Stillwater ADR (NYSE: SBGL) Feb-18 $4.67 $3.90 Buy $3.58 -16.5% Matthew Carr

Sherritt International Corporation (TSX: S) Dec-17 C$1.35 C$1.22 Buy C$0.91 -9.6% David Fessler

Pioneer Natural Resources (NYSE: PXD) Aug-17 $163.90 $172.34 Hold $141.38 5.2% Matthew Carr

TRAILBLAZERS PORTFOLIO Small, innovative companies with high revenue growth rates

AusCann (OTC: ACNNF) Mar-18 $1.34 $1.29 Buy $1.01 -4.1% Matthew Carr

Canopy Growth Corp. (OTC: TWMJF) Mar-18 $23.35 $24.50 Buy $19.35 4.9% Matthew Carr

BYD Company Ltd. (OTC: BYDDF) Jan-18 $8.79 $9.10 Buy $7.40 3.5% David Fessler

VanEck Vectors Rare Earth/Strategic Metals ETF (NYSE: REMX) Dec-17 $28.50 $28.87 Buy $24.41 1.3% Matthew Carr

Cheniere Energy (NYSE: LNG) Sep-17 $42.79 $52.02 Buy $44.99 21.6% Matthew Carr

Sociedad Química y Minera de Chile (NYSE: SQM) Sep-17 $46.93 $47.05* Sell $47.93 2.0% David Fessler

ABB Ltd. (NYSE: ABB) Jul-17 $25.18 $23.17 Buy $21.45 -8.0% Matthew Carr

Raven Industries (Nasdaq: RAVN) Jul-17 $33.10 $35.25 Buy $29.18 7.7% Matthew Carr

portfolios

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CEO & Executive DirectorEmerging Trends StrategistEnergy and Infra. StrategistMacro StrategistManaging Editor

Julia GuthMatthew CarrDavid FesslerEric FryPatrick Little

Managing Copy EditorEvent DirectorDirector of ResearchArt DirectorGraphic Designer

Anne MathewsSteven KingRyan FitzwaterAlison KassimirChelsea Centineo

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Prices as of 3/22/2018

*Current price based on official sell date