Holdings Petroleum from US

Traditionally, the oil prospecting business has been considered highly speculative and somewhat risky on many levels. We most certainly recognize this factor and have taken every means necessary to address these issues. There are several factors in the oil business that have changed over the last 10 years.First and foremost, technology has improved to the point where geological surveys below the earth’s surface, utilizing the latest state-of-the-art penetration devices, can give extremely accurate pictures of oil deposits. Not only are we now able to pinpoint where the oil is, but determine with great accuracy approximately how much oil is there.

Second, the price increase in oil over the last ten years has allowed the industrial sector and the US government to push for domestic production of oil. While in the early 1990’s the price of oil was relatively low, therefore it was not cost effective to pursue domestic drilling programs. Today, with oil hitting lifetime highs resurgence in domestic drilling is taking place and creating a new frontier for those who are willing to make an investment, which has the potential to be extraordinarily lucrative.

Third, and finally RISK! In the post WWII era, drilling for oil as an independent or as a “wildcater” proved in many cases to be a boom-bust proposition. Now with market price and technology, as two driving forces, there is no reason not to be able to extract oil from a proven reserve well site. The big question is simply “how much oil” will be derived from a site. US Petroleum Holdings is not in the business of taking unnecessary risk. All the sites we are involved in have proven reserves – but that may not be enough. Consequently, we have implemented a risk management system through an advanced asset allocation program.

Generally, Risk Management is the process of measuring, or assessing risk and then developing strategies to manage the risk. In general, the strategies employed include transferring the risk to another party, avoiding the risk, reducing the negative effect of the risk, and accepting some or all of the consequences of a particular risk.