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

To: Ken Robbins who wrote (49316)	8/13/1999 5:19:00 PM
From: P.Prazeres	Respond to of 95453

techstocks.com

To: Ken Robbins who wrote (49316)	8/14/1999 1:59:00 AM
From: Aggie	Read Replies (1) \| Respond to of 95453

-O.T.- Ken, hello again. Nope, I was figuring 10 MMcfd as marginal, but please remember I have a few caveats. My recent experience is overseas, in remote areas. For this arena, a comparable (trouble-free) well would be AFE'd for $20-30MM, and you would expect to find wells capable of about 20-25 MMcfd in order to make them commercial. Depending on the distance to market, you would also be looking to prove up around 0.5 - 1 tcf to justify development. Each case is different and I give these numbers only to impart a sense of scale. Don't forget that, once production starts, you will be budgeting in all of your costs against the production revenue, not just the AFE. You have severance taxes to consider (which are substantial in Texas, don't know about La.), you have the royalties to pay out (out of the gross), and you have the G&G (office overheads, exploration & finding costs) to figure in as well. And don't forget the pipeline fees. My estimate of $4MM for an 18,000' well was, I think, on the low side. I can remember sitting 18,000' sour gas wells in East Texas that were budgeted a lot higher, and that was in the early to mid '80's. To all you lurkers, I would be very interested to get any info you all may have on what these wells (or comparable ones) AFE for (what their budget is), and any other thoughts on what the G&G and overheads are like these days for domestic operations. All contributions cheerfully welcomed, I'm just curious so don't knock yourselves out. Regards and a Good Weekend to All, Aggie