Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: articwarrior who wrote (51562)	9/21/1999 4:43:00 PM
From: dfloydr	Read Replies (2) of 95453

MEXP: over on the Yahoo thread there are postings claiming that BOM is backing out of their prospective loan because their requirement to go forward is that gas be $2.72 at the end of the quarter. Besides the fact that we are not yet at the end of the quarter ... A few notes: 1. Let's remember Bill Baumgartner mentioned to at least a couple of us that they have been holding open "a few options". BOM was probably the most attractive because of the existing relationship. I tried to call BB today but he is out until Friday. 2. Elsewhere I have asked for an understanding of the collapse in gas prices. I even postulated a few possible scenarios ... ie: perhaps the gas producers choked back production last year when prices collapsed and now are "cheating" by opening up the valves. Today I called one of the top oil and gas consultants who has been quoted here and in the press several times over the past year. (I did not ask permission to mention his name, hence the lack thereof). He offered the following comments: a. we are in a shoulder season when gas prices are typically weak. b. you can only store so much gas and there was probably a bit of a scramble to make sure gas was bought in for storage given the clear prospects for higher prices through the winter. c. Compared to when we were both on Wall Street years ago, there are very large pools of money speculating in oil and gas futures today and once they shift positions, we see extremes short term. This is such an aberration. Overall, he is quite confident that not enough wells have been drilled over the past year to meet the normal needs in the US. I did not ask about any possible new outside sources such as new Canadian pipelines, but those developments are, I am quite sure, well known to most everyone in the industry and are probably factored into everyone's assumptions long ago.

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