RICK / SIX-SIX-SIX
I am hoping that the water is just dampening the situation in the Lost Hills play. It definitely has put out the ignited fire which had been fueling positive speculation by investors in shares of these companies.
However, I agree with you that this story is far from coming to a close. Still too many positive happenings that occurred and a whole bunch of questions remain to be answered.
Earlier today, the article which appeared in the Financial Post and National Post resulted in quite a few people questioning the content. They may end up being correct in their comenting. The article said the soon to be spudded relief well was to be a replacement well. It turns out that this is what will happen - after the initial well is intersected and cemented. This may of been the proposed plan all along. It doesn't really conflict with what has been said from Bakersfield - just goes on further in definition.
The most recent info from Bakersfield stated that the water from the well wasn't exactly unexpected and wasn't unusual.
"It looked to us that it was going to be a race between us capping the well and it going out," said Larry Flak, vice-president of engineering for Boots & Coots. **"It's real common for these wells, after they've blown out for a while, to start making water."
Although there is no longer enough oil and gas in the flow to spontaneously burn, there is enough gas pressure from the 17,640 foot-deep well to force a 200-foot tall geyser into the air, Flak said.
Overpressure in a oil or gas reservoir could be a good thing — if the reservoir is large. For a small reservoir, it could appear large because of the volume and pressure, but be emptied in days.
No one yet knows which is the case in the new Lost Hills field.
Those comments do not exactly douse the hopes of a successful commercial well here. **I would of liked to hear comments from Boots & Coots about what usually happens in phase III, after a blown out well makes water.
I think focus, from an investors perspective, should be on the source of the water. Your explanation satisfied my thoughts and I think thereafter that Boots and Coots stated the same thing.
Investors will be looking at re-drilling to target depth, after cementing in well #1, as a positive signal to speculate once again. That's not exactly the way I feel. If insurance coverage allows for complete redrilling to target, it just tells me they have a free ride in terms of further expense. If the companies are to bear the expense after cementing - it would be a good signal.
We never knew what we had, but all prior doubts were voiced in a positive manner. We still don't know what we have, but doubts now have turned into a negative train of thought regarding the well. Bottom line common denominator is this -- we simply still do not know.
Environmental concerns will be a big subject in the near future. We are just beginning to see short comments in the reporting related to this subject.
I am disregarding activity in trading of shares in these companies. The market is being driven by speculative greed and now fear. These characteristics are normal in this type situation. What would be interesting is to see what occurs to those shares in the large institutional block purchases of just a few days ago. If these purchases are sold, it would be a very bad signal. We have to assume they were purchased based upon feedback from the oil companies themselves. Decision to acquire these blocks had to have been based upon their staff analyst's due diligence after communicating with these companies. Decision to sell these shares would have to be based upon the same line of communications.
Did you have to hit me with this 666 thing. I feel guilty and don't even know why. (just funin)
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