Counters to pimp's post:
<can find a lot more oil for less dollars>
That might be the case if we were comparing apples (easy fields: circa 1988) to apples (easy fields: 2002). But the fact is that there are far fewer apples to pluck from the 2002 tree than in 1988.
<even though finding smaller fields due to seismic, tech changes>
These tech changes have resulted in the ability to take out the economic product quickly and efficiently resulting in rapid depletion. Further the real reason they are finding smaller reserves is that there are fewer good targets.
<seem to have a rolling scenario of running out of oil>
"Running out of oil" is not the issue. Running out of enough cheap energy most certainly is however.
<15-18 oil and 1.50- 1.80 NG>
Could happen although unlikely, but those prices are not nearly high enough to support much new development at all, leaving us with an even bigger problem in 2003 (I see it coming on in a flash THIS year, with people waiting it out missing a good chuck of the move). Rig counts are already way down. The energy stocks will look over that valley because the other side would be absolutely mouthwatering. Conclusion: keep stinky bidding them. Mine so far: PCX @ 23.96 and AOG @ 34.70: up nicely on the merger. I'm up at bit on PTR (17.50), CEO (18.08), CED (23.84), and flat on SJT (9.47), BR (34.38) and FST (24.13). Of late I've gone for some Canadian NG small caps: PEL @ 3.15, THY @ 2.50, DXI @ 2.10, KCH @ 3.70. I'd like to get MRO at 26 and change.
<Simmons has been telling the same story for the last ten years.>
Many who have correctly made great macro calls have been early in recent years. I've read Simmons closely and I'd say he has intensified his argument in the last three or four years, not ten. I've only recently bought into the Simmons scenario and ardantly. Too much neglect of the energy sector, not to have problems.
Other notes: there is a substantial spec short position in crude oil and natural gas especially so: traders long 10,751 / short 64,056. Fuel for a rally when it comes. |
