500 gas rigs ? Many of the independents raise money for drilling from private investors. With lower gas prices and a rapidly dropping stock market, they were having a rough time raising money before September 11.
I can tell, be cause the last two weeks I was getting multiple repeated calls from people I had said no to before.
One group, which has a decent track record and never sells less than a 1/2 unit size, was offering 1/4 units.
At this point, I think many of these outfits have given up and cut their investment sales people, and cut back their drilling plans. ( By the way, I don't recomend this (drilling programs) as an investment category - there are too few good outfits, and a bunch of marginal ones.) I would have been much better off buying & selling the royalty trusts at the right time.
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There's still a lot of wells being drilled and completed, and a waiting list for rigs...
As the waitng list shrinks due to cancelations, the actual active rig count doesn't drop nearly as much until a given rig drills it's last well....so I would expect a slow but accelerating decline in the rig count, until one month it just drops off a cliff... and the next month it's down even more.
Jim P, when would you expect this drop in rig utilization ? December or out to February ? |
