Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: Mike from La. who wrote (28049)	8/20/1998 2:00:00 PM
From: upanddown	Read Replies (2) of 95453

Well, Mike, one thing you may be missing is.... About 1,000 wells have been capped in Daqing, Jilin and the Tarim Basin, with output for the first quarter of this year falling by 4.89 million barrels, or 700,000 tons Thats about 60,000 barrels a day. I think you may be kidding yourself about the effects of capping marginal wells. I believe this is mostly small stripper wells producing a few barrels a day. There are lots of them and it would have some effect on production but I really don't think it will be decisive in turning prices upward. As Doug Fant said recently, there are 5 million BPD of unused capacity in the middle east and lots more in places like Venezuela and Mexico. A price turn will still depend on producer discipline to bring S/D into balance, IMHO. Good luck, John

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