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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: quehubo who wrote (23159)5/29/2003 9:15:44 PM
From: jim_p  Read Replies (2) of 206087
 
Que,

I feel that both supply will increase more than expected and demand will fall more than expected.

I own very small non-operated interests in over 1000 wells mostly in the Southeast, and this month is a record volume for me with no increase in drilling. When prices are higher, operators find ways to maximize production from existing fields. Cash prices are also a lot higher than spot prices. March production had a number of fields that received over $9.00 per Mcf for me.

Don't forget the impact of flush production. With increased frac technology many wells will now recover 30-50% of the total reserves of the well in the first 12 months and with increased seismic technology more wells will drain a higher percentage of the field by locating the well in the optimum location.

Many here talk about the accelerated depletion as a result of increased technology, but don't lose site of the fact that all of that increased depletion will equate to increased flush production in the first 12 months of a new wells life.

Jim
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