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

To: jim_p who wrote (76555)	10/17/2000 6:07:54 PM
From: Meridian	Read Replies (2) \| Respond to of 95453

Looking at production from NG bellwethers like BR, I would conclude that flush production is not helping. Plus, just because you see the end - you know what is going to undo the NG cycle (more production) - doesn't mean it's time to leave. When investors start paying big multiples for Gas E&P's (10-15X cash flow) then it may be time to leave. From where I sit, domestic gas production is set to increase just barely this year. But a good check will be to monitor production increases from good operators. You can't think that TX will increase production next year.

To: jim_p who wrote (76555)	10/17/2000 6:12:31 PM
From: Archie Meeties	Read Replies (2) \| Respond to of 95453

The depletion sword cuts both ways. I remember discussing with somebody on TMR yhoo board (what a wasteland that is) about the possibility that an explorer who had an extensive library of small, high initial production/rapidly depleting wells should be analyzed differently than one with a mix of larger targets. The PV values will favor the latter, but earnings growth the former! As the reigning factor in determining share price today is earnings growth, my guess at that time was that a successful driller of small wells with high initial production would ramp earnings far faster than predicted and also outperform an outfit with larger targets in the initial leg of an energy bull. (and perhaps underperform thereafter). Thoughts along those lines were one of the reasons I bought TMR last year despite the Shell prob and the massive debt. CRZO and iso's ESNJ fit into the category as well. I'm sure it's nothing new to anybody within the industry, but well, that's not me. -g-

To: jim_p who wrote (76555)	10/17/2000 6:21:55 PM
From: diana g	Read Replies (3) \| Respond to of 95453

How To Play NG Hi Jim, With signs evident that Texas NG production is increasing (expectedly, in that NG drilling increased first there) and the results of the large widespread increase in NG drilling yet to come, your comments on flush production make good sense to me. The question is how to play it. I would not be surprised to see a big sell-off in the NG focused E+Ps before Spring. ---But when? Between now + year end to rotate into tech? Just after the new year for tax reasons? Or as NG spikes in January February cold spells? Other? What do you think? (All opinions solicited) regards, diana

To: jim_p who wrote (76555)	10/17/2000 6:43:00 PM
From: Sharp_End_Of_Drill	Read Replies (1) \| Respond to of 95453

Jim_p, from where you sit I'm sure you have a very good perspective on natural gas production. Am I correct that your take is the 250-300 more rigs drilling for gas now compared to a year ago will result in a bunch of completions now and in the near future that will be running flush? What I wonder about is the depletion as a whole. Prices of $5.50 encourage all producers to draw down a little harder than normal. Aren't you tempted to ramp all your orifice sizes up a notch in times like these? With wells being run harder, and 850 rigs drilling, why are the production gains proving elusive? Also, if you firmly believe the $2.00 prediction, wouldn't you be pounding the table right now for producers to hedge into the current futures prices? At $5.50 I'd probably hedge at least 50% if the choice was mine. Sharp

To: jim_p who wrote (76555)	10/17/2000 6:55:50 PM
From: Aggie	Read Replies (2) \| Respond to of 95453

jim_p Good Evening, Agreed, in spades. Before 2Q 2001, we will see $22 oil and $2.30 nat gas. Although I will say that I believe the long term price of oil will shift its price baseline up over the $20 mark. That much I believe is here to stay. Regards to all, hunkered down. Aggie

To: jim_p who wrote (76555)	10/17/2000 7:38:29 PM
From: BCherry168	Read Replies (2) \| Respond to of 95453

Jim, I don't know about your statement on "flush production" which I will quote for reference: "..but there is also no doubt that flush production from new wells drilled over the last year will cause an over supply on NG as soon as next spring with prices below $2.00 per Mcfe. Thats right below $2.00 per Mcfe......" Have been in the business a long time. I do not think there is enough capex going on to do this, nor do I think that there are enough rigs to do it even if the e&p money were there. Of course, anything can happen, but my thought is that without a serious decline in demand, the price of NG will stay well above $2/mcf. If the demand declines that much, we are all in deep you know what. Just my opinion.

To: jim_p who wrote (76555)	10/17/2000 8:32:19 PM
From: Ed Ajootian	Read Replies (1) \| Respond to of 95453

Jim_p, Everything I've seen is that so far all these new wells have only served to increase production a miniscule amount (I believe 1%) higher than it was last year. Looks like this "flush production" is so far being met with an equal amount of depletion of the old wells. And once we get by the next few weeks all production will just go to meet the current demand. Your prediction of future NG prices is dramatically lower than what the futures contracts are betting on. Wondering why you don't just short the June contract. If it really goes to $2 you will be a multimillionaire. All the experts are saying that if we have a normal winter it will take all of next spring, summer and fall to rebuild storage levels. Is your prediction predicated on a warm winter? If so, what makes you feel it will be warm? If not, why are you reaching such a different conclusion than all of the other experts out there, many of whom have also been hacking around for > 25 years? <g>