Playing the oil game is not for the faint of heart. Hope is generally the name of the game. In a general sense, covering bases is the way to go considering all the variables that can come into the game. If an investor can find an experienced company that is playing all sides to cover bases, a profit is sure to be made.

China North East Petroleum Holdings Ltd., a petroleum exploration and development company, works to develop and exploit oil resources primarily in the Northern Parts of China. Currently, the company controls 247 wells with all being in production.

Although this particular circumstance may not seem all that unique in most Chinese Petro situations, China North East has an interesting position; it has developed a relationship with PetroChina for a particular portion of its reserves. In-of -itself this might sound advantageous , and it would be, past others having the same sort of agreements. North East, however, has substantial opportunities past its obligations with PetroChina. Although not being privy to negotiated contracts (10-Q 20-40% -variable-over 20 years at 112 leases), the way that the company has structured its wells, outputs and locations leaves it well positioned to not only take advantage of the likely fixed price contracts with PetroChina, but also opportunities that the open market may, at some point, offer.

Currently, the company is operating at 4 lease site with a total of 5.4 billion barrels of production. Its primary site is estimated to contain reserves, proven and other wise, of 5.2 bbl. As the company takes advantage of its likely fixed price contracts with PetroChina, it will be well positioned though other contracts to service the other oil markets of China, a market well understood to be attractive in any sense one might think of. Although current oil markets are being a bit timid in their pricing structure of late, China North East Petroleum does seem to be playing the hedging game quite well. If their relationships with PetroChina can bare the strain of internal political strife, this one may be a real long term winner.