American International Petroleum Corp Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : American International Petroleum Corp

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: faris bouhafa who wrote (503)	7/21/1997 3:52:00 PM
From: qdog	of 11888

Also, Kenny, what is the value of oil in the ground if its not $17/barrel? Any ballpark figure? Depends on quality and what the commodity markets are setting the price for that quality oil. You can't use the WTI price as that is benchmark high quality, unless this is like quality. Bloomberg site gives the price for various grades of oil such as WTI, Brent, Dubai and others. Also Faris you have to figure in the cost of producing that crude into your model. Saudi's cost is something of the order of $2.50/bbl, but Alaska North Slope is way higher. Just from the Tengiz field and prelim calculation, it looks that their production cost will be around $5.60/barrel. That's not accurate but a very rough estimate that probably slightly to the high side. Nontheless you still have to subtract some production cost from the cost per barrel of oil. Ex: Wellhead price - production cost. If it is a $17/boe and it's cost $5 to produce then there is a actual pre tax is $12/boe. One other cautionary note; there is alot of future buying of that crude that isn't the same as the spot price. That could be higher or lower depending what is happening with crude prices. Right now it's been in decline since the beginning of the year from a high of around $25/b to around $19ish recently for WTI (West Texas Intermediate). Some forward looking has oil ranging from $17-20 for the next year. It depends on supply and demand. More supply and the demand isn't keeping pace, price falls. Less supply and increase demand price goes up in the commodity pits, where the real price is set. Let's say Iraq is allow to sell oil freely again, there preGulf War production was around 2 mil/day. That is alot of crude to hit the market and will cause a fall in prices. More significant finds and subsequent production will only be a further drag on prices, if demand does not increase substantially.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next