Energy

The Castle Investment Roundtable met in March to discuss the state of energy worldwide and to identify attractive opportunities for future investment. The Roundtable is headed by Nate Cultice, Castle Wealth’s founder, and consists of accomplished colleagues with Wall Street, hedge fund, insurance and entrepreneurial backgrounds. The major conclusions from this meeting are laid out below. More detail will follow in future market newsletters and on the Castle website.

Some good investment opportunities exist in foreign energy companies – natural resources are now at a premium worldwide and resource-rich countries are nationalizing their oil and natural gas industries (where the country’s government takes ownership away from private industry) to take a greater share of the profits. Investment opportunities exist because governments still need help with the development of these industries. American companies, however, are often being shut out of these contracts because they were late to establish ties with these governments and because of the alienating effects of U.S.’s foreign policy in Iraq.

• China, in particular, is forging deep ties in Russia, Africa and the Middle East; however, it is not currently advisable to invest in Chinese companies.

• Eni and Total (the “ExxonMobils” of Italy and France) are also getting many of these contracts and are important investment opportunities.

• Because American companies are often being shut out of foreign oil and natural gas development contracts, the US is not likely to completely pull out of Iraq due to access to Iraqi oil.