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Gold/Mining/Energy : KOB.TO - East Lost Hills & GSJB joint venture -- Ignore unavailable to you. Want to Upgrade?

To: dad who wrote (14139)	2/10/2001 2:52:27 PM
From: grayhairs	Respond to of 15703

Hi dad. <<These gas shows are extremely meaningful.>> If you get my drift, is "extremely meaningful" as good as, or better than, "significant" ?? I simply want to caution you that we've heard about similar encouraging shows from the same fishing holes before. :-( :-( :-( Have a good one. Later, grayhairs

To: dad who wrote (14139)	2/10/2001 5:46:06 PM
From: brian krause	Read Replies (1) \| Respond to of 15703

Friday February 9, 6:00 pm Eastern Time Natural gas production lags record exploration rate (UPDATE: Adds gas production figures in paragraph 7) By C. Bryson Hull HOUSTON, Feb 9 (Reuters) - Record high natural gas prices have thrust North American exploration to its highest level in 10 years, but the correlating production yield is not growing as quickly, say industry executives and analysts. The big problem is that well yields are down and decline rates are up, said analyst John Olson with Houston investment house Sanders Morris Harris. ``Typically, when you drilled a gas well in the U.S., it would yield 1 billion cubic feet or something varying around that. Now, a lot of the stuff we're doing is 300,400 or 500 million cubic feet and that creates a very big problem,'' Olson said. ``It doesn't help with the very high decline rates we're afflicted with,'' he added. Exploration hit its highest level in 10 years late last year as U.S. gas prices went to an all-time high of over $10 per thousand cubic feet (mcf) late December, from which it has since leveled to around $6 per mcf. Oil services firm Baker Hughes Inc. (NYSE:BHI - news), which tracks the number of actively searching rigs, said there were 903 in U.S. as looking for gas for the week ending Feb. 9, compared to 615 a year ago. Gas production however only increased to 1.7 trillion cubic feet in December, according to estimates from the Energy Information Agency, from 1.5 trillion cubic feet in December 1999. And the drills cannot meet demand fast enough to rebalance supply and demand soon, one executive said. ``The timeframe for rebalancing may be a little longer than was initially expected, but we still see all the phenomena in place to bring about rebalancing in the North American gas market,'' Ralph Eads, El Paso Corp. (NYSE:EPG - news) executive vice president told reporters and analysts last week. ``But we find it pretty remarkable that we haven't seen greater production response, given that we have a high rig count and people have been applying the capital.'' Capital expenditure budgets are up across the exploration and production (E&P) sector, though about 15 percent of that has been eaten up by a higher equipment day rates and worker costs. ``What you're seeing is catch up. It's bad planning on the national level, because we haven't had a national policy,'' said Ian Miller, president of EDS Corp.'s (NYSE:EDS - news) Energy Industries subsidiary. ``And it's bad planning on the part of the producers.'' Eads agreed, pointing out that E&P companies lived through the lean times of the last 15 years by drilling as many high-yield and low-risk wells as they could. ``Now when they want to go to look at projects where they can produce a lot of rate quickly, they don't have much of that left because they used it up already. I think it's a lack of drilling inventory that's the main problem,'' Eads said.