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Strategies & Market Trends : Commodities - The Coming Bull Market -- Ignore unavailable to you. Want to Upgrade?

To: Ahda who wrote (288)	6/18/2001 6:46:36 PM
From: craig crawford	Read Replies (1) \| Respond to of 1643

ok, i followed that and what you said makes sense. thanks for going into more detail :) ..................................................................................... Monday June 18, 4:45 pm Eastern Time Strong gas prices here to stay, say energy execs biz.yahoo.com NEW YORK, June 18 (Reuters) - Strong natural gas prices are here to stay for the next four to five years, top energy executives said on Monday, conceding the industry will be hard-pressed to uncover new production in the United States and Canada. ``The low hanging fruit has been gotten to,'' said J.W. Stewart, chairman and chief executive of B.J. Services (NYSE:BJS - news),an oil and gas drilling services company. ``The easy stuff isn't out there any longer and it takes more time, technology, and cost to access these areas.'' Speaking at a Banc of America Securities conference here, energy executives said the biggest challenges they face are a shortage of skilled workers, limited access to new drilling areas, and the rapid fall in production from older wells. That means that natural gas prices should continue to run between $4 and $6 per thousand cubic feet over the coming years, even with a record number of drilling rigs searching for natural gas in the United States. In 1991, 42 percent of the rigs working in North America were drilling for natural gas, while today that figure is closer to 80 percent. But ``there is not a 1-to-1 ratio of rig activity and the production that comes from that,'' noted Edmund Segner, president of EOG Resources Inc. (NYSE:EOG - news), one of the top U.S. independent exploration and production companies. Natural gas prices soared as high as $10 per thousand cubic feet late last year, helping create a national energy crisis which has included rolling blackouts in California. While natural gas prices have since declined to around $4, they are still well above historical levels and demand continues to rise after climbing 18 percent in the 1990s, according to executives. George Lindahl, vice chairman of Anadarko Petroleum Corp. (NYSE:APC - news), the largest independent U.S. exploration and production company, said prices should remain high with U.S. supply expected to grow by only 2-3 percent annually over the coming years. Supply isn't likely to grow faster than that until new frontier areas -- such as the Arctic National Wildlife Refuge -- are opened to drilling. ``The biggest problem this industry faces is a lack of places to drill,'' Lindahl said. For the moment, the best production growth prospects are in the Gulf of Mexico deep waters, Wyoming, Louisiana, and Alberta, Canada. By contrast, little new production is coming out of the Gulf of Mexico shallow waters, Texas, and Oklahoma, said EOG's Segner. ``For us just to stay even,'' he said, ``we have to run faster,'' because of declining production from older fields and rising demand. ``We're going to stay in a very supply constrained environment.'' But Eugene Isenberg, chairman of Nabors Industries Inc. (AMEX:NBR - news), the largest land drilling contractor in the world, said the recent dip in natural gas prices may, in fact, help the industry because consumers won't be as likely to switch to alternative fuels such as coal or fuel oil. ``I'm a believer that these gas prices -- now around $4 -- are a helluva lot better than $7 or $8'' over the long term, said Isenberg.