Silicon Investor (SI) -- The First Internet Community

STOCKTALK

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 : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: upanddown who wrote (48118)	7/16/1999 3:47:00 PM
From: stevedhu	Read Replies (1) \| Respond to of 95453

John, Oil blew up again at the close, to close at $20.60 with the high being $20.70, just a few seconds earlier. Take Care Steve

To: upanddown who wrote (48118)	7/16/1999 4:07:00 PM
From: Douglas V. Fant	Read Replies (2) \| Respond to of 95453

John, Yes majors and big state oil companies conservatively estimate new discoveries. I am aware of two major discoveries offshore Africa one announced, one rumored to be announced in the near future which are also in the 1B range. But remember- they are currently estimating economically recoverable reserves not total producible reserves in place. So for a wildcat discovery like Crazyhorse, the economically recoverable reserves are currently estimated including the costs of all of the infrastructure and well drilling, pipelines, etc that must be done to develop the prospect. Once the infrastructure is in place, then the total cost of developing additional reserves in the same area drops signficantly- i.e the total economically recoverable reserves from the discovery will rise. Deepwater GOM is one of the premiere deepwater plays in all of the World, with maybe west coast Africa, east coast Brazil, and Indonesia following. The Crazyhorse discovery just adds more proof of that fact. As to rig usage, my guess is that BP has the drilling rig under a multiyear contract. They will divert with MMS' approval off of its current drilling plans that rig to full time development of the Field. So in that sense it will take that rig off of the market for some time. A more likely effect for adjacent block owners is the "panic factor". Like "Oh shit BPAmoco-Mobil just made this huge discovery. We better get off of our posteriors and drill our portfolio of deepwater blocks in the same trend before BPAmoco and Mobil put us into a bad competitive position." So yes- this should stimulate interest in additional deepwater drilling....