SI
SI
discoversearch

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 : ATPG Shareholders
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: 56Chevy who wrote (3524)10/24/2013 11:36:08 AM
From: Kramer383 Recommendations

Recommended By
everett2
greatpricepearl
positiveenergy18

   of 3620
 
Insurance costs are a small fraction of the expense of working offshore. The really big expense is the cost of dry holes. Only about 33% of deepwater wildcat wells end up being successful. At $100MM per well, that can be really painful. Also, the development of a discovery can take up to 5 years and several billion dollars if you have to set your own platform. That is why most of the industry has to focus on the prospects where the reserves are reserves are 100MMBO or larger. It takes that kind of resource to make the prospects economic. The smaller fields usually don't get developed until their is a platform nearby with enough capacity to accept a sub-sea tie back, (like Clipper).

The one advantage that the onshore shale plays have over offshore is risk of a dry hole. In most of the shale plays you have virtually a 100% chance of recovering at least some oil/gas, the only question is how much, and how long will it take to deplete the reserves. This is why engineers love the shale plays, it's purely a numbers game that can be calculated with a high degree of certainty.

I doubt that the shale plays will drive oil prices to $50, but if they did it wouldn't last long. Both onshore and offshore drilling would virtually cease if that were to happen, rig costs would fall dramatically and in fairly short order demand would outstrip supply once again and prices would rise.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News