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: William JH who wrote (37319)	2/11/1999 11:39:00 AM
From: Douglas V. Fant	Read Replies (3) of 95453

WJH,Sure my pleasure- And also factor in two Canadian Natural Gas Pipeline Systems- the gas P/l system from western Canada is more or less full. Also a new gas p/l is being built from offshore Newfoundland to bring in Hibernia gas into the eastern US Seaboard. The Hugoton Gas Field in SW Kansas is huge, but its production is stable- the West Texas Permian Basin has some good gas propsects just now being exploited which will add some to supplies. Mobile Bay has good additional gas potential (super sour gas-needs treatment to remove H2S) but otherwise the shallow Gulf gas production will decline. Deepwater, well unless it's one mother of a gas discovery, my guess is that producers will simply reinject the gas to maintain reservoir pressures while they produce the oil instead. Add that all up and you have to ask from whence the gas will come in a couple of years to meet growing demand. Oil as you are aware is easy to transport. Just put it in a truck and drive it off! (Well stabilize it first or else it might explode!) Natural gas on the other hand can't be trucked. It needs to be pipelined and the pipeline needs compression facilities to move the gas along the way. It costs money to build those facilities and takes some time. Indeeed with the turn toward natural gas production in NA that's why for e.g. WFT and GE combined on the compression JV- they see incresed compression needs moving forward as natural gas comes into greater favor.... Finally note that gas wells deplete on the whole a lot faster than oil wells- if you do not keep reworking and drilling more gas wells, then your gas production will drop. Oil production on the other hand declines at a slower pace. For e.g. I know of a lease in west Texas that has produced 150bbls/day of sweet oil for 30 years- and only needs a cleanout of the well bore every two or three years- pure cash flow. You would never find that same situation in a gas well IMO....They need more attention (Which should make OS companies that do well servicing workhappier moving forward...)..

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