Hey Sarge, this article is verrrrry bad news for FGH bears. Very bad, indeed.
oilandgasinvestor.com
You will note (with great benefit, I think) that it is written by an individual (not disguising himself as a "reporter") commenting on a report by the industry to US Energy Secretary Richardson. This is NOT the imaginary ramblings of some fly by night, short sellers, newsletter writer, disguising himself as an accountant. (note, no names mentioned). This article ONLY refers to the need to have enough rigs to supply the NG needs of the US alone, not to mention the now BOOMING Asia and Europe.
In short: There ain't enough rigs/drilling units out there to supply NG needs alone. Wait till Brazil really heats up and starts that giant rig/fspo/drillship sucking sound. BTW, they are selling more offshore blocks in March, you know.
This quote is a prediction from an engineer who works for BR, one of the worlds larger E&P's.
"Very few new onshore drilling rigs have been built since the mid-1980s," the report points out. If the 5% annual historical attrition rate continues, most of today's 1,700 onshore rigs will be retired by 2015 and almost 1,900 replacement units will need to be built, according to Travis D. Stice, a regional engineer for corporate operations at Burlington Resources Inc. (NYSE: BR) in Houston who outlined the report's supply findings. Seventy-two additional rigs (10 deepwater units, 32 platform rigs and 30 jackups and barges) will be needed offshore at a higher average cost per rig than onshore units, he told the council. "The amount of predicted expansion for both sectors should sound an alarm, since drilling contractors and rig manufacturers currently are not in a position to meet this projected demand," Stice said. |
