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Strategies & Market Trends : BAK - Investing

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From: xxyy	5/11/2012 2:39:55 PM
	3 Recommendations Read Replies (1) of 3249

Re: Total Gas Leak A few bits of news here. 1) elgin.total.com The well is depleting itself rapidly. Original estimates were 200,000 cubic meters/day; now it's down to 50,000 cubic meters/day --> so 75% depletion in a month and a half. This implies to me that the well will actually just shut itself down at some point (i.e. when atmospheric pressure > the pressure of the depleting well). The top kill starts in "a few days." Unfortunately, they've said this each week for maybe two weeks? I think one has to apply the "software engineer estimate" rule here. Whatever they say, double it and add a week. This also held true with BP. 2) forbes.com The "correction #2" is from me. Boy this guy was sloppy. Whoever corrected his math the first time, caught him off by around 900x (units, units, didn't your physics professor tell you). I pointed out that he's off by 2x more. What's a few orders of magnitude when you're writing business journalism? 3) vanguardngr.com says that Total says the gas leak will cost $300-$400MM. I can't tell whether this is a worst-case or an estimated base case. $400MM sounds high relative to the well characteristics (i.e. rapid depletion, with mud pumping about to start). Low pressure gas = easier to stop with mud - you just need the mud to push down harder than the gas pushes up .

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