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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: Ed Ajootian who wrote (19665)3/5/2003 6:41:29 AM
From: jim_p  Read Replies (2) of 206281
 
Ed,

The royalties in the Gulf are a sliding scale depending on when you spud the well from the time you bought the lease.

The 12.5% in the minimum.

NG prices were a lot higher in today's dollars back in the late 70's and early 80's and oil was going to climb to $100.00.

Once the perception changed to "we will never see low prices again", the service sector built 5,000 land rigs and the pipeline companies built LNG terminals to import all that NG that was never going down below $5.00.

As a result, oil eventually dropped down as low as $10.00 and NG fell as low as $1.50.

Then there was a long time period when NG was never going above $2.00 and oil would never go over $20.00.

This is an over simplified version of the story, but never say never. There is plenty of NG and oil in the world today. It's all a matter of price and perception.

Jim
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