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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: Second_Titan who wrote (5798)	7/6/2001 4:32:12 PM
From: Sweet Ol	Read Replies (1) \| Respond to of 23153

Don't forget that back in the 70's when we created the "gas bubble" we had over 4,000 rigs working. I don't remember how many were drilling for gas, but we also had a lot of good prospects then. However, the success rate is better today. But, all in all, it is questionable how long the supply bubble will last. (Ah, the $64 question!) Best to all, John

To: Second_Titan who wrote (5798)	7/6/2001 5:19:58 PM
From: energyplay	Read Replies (1) \| Respond to of 23153

Rigs looking for gas - many of these are in areas where there is BOTH oil and gas strata. If the oil zones look strong, and the gas zones weak, they may be completed for the oil...this would tend to shift supply somewhat, and could happen very quickly... Looks like 1000 rigs with 3-D seismic equals 4,000 rigs with 2-D. I think the average well depth is a little deeper too - maybe 5,700 feet vs. 4,400 feet in the 1970's. My guess is the average rig size is bigger, with more horsepower and more weight, so it can drill a little faster than 1970s. Fracturing & horizontal drilling is much better also. Now if we can get some reduction in the total number of rigs looking for gas, we may be able to get some traction from depletion....

To: Second_Titan who wrote (5798)	7/6/2001 11:45:16 PM
From: upanddown	Read Replies (1) \| Respond to of 23153

Que I would guess that another important factor in a large majority of rigs going for gas is that oil production peaked in this country thirty years ago while NG production is not supposed to peak for another twenty. Onshore drilling for oil in the lower 48 is probably the most played-out exploration region in the world. When was the last time anyone heard about a significant oil strike onshore in the lower 48? Many of the big E&P's may not have much in the way of oil prospects. I think if there was going to be a big switch to oil based on price, it would have happened a while back but you can't get blood out of a turnip. John

To: Second_Titan who wrote (5798)	7/7/2001 1:13:48 AM
From: JungleInvestor	Read Replies (1) \| Respond to of 23153

<<The present RIG count includes over 1,000 RIG looking for gas. This after many months of high activity. So after many months of first lower than expected draws and then higher than expected builds it seems hard to deny what the analysts have just come out and said: "Duh there is a supply response afterall".>> Que, per Texas RRC, 1st quarter production rose about 1% while rigs rose about 50% (believe Texas alone accounts for over 500 rigs and about 25% of nation's production). Anadarko has a really interesting presentation that I'd recommend you look at(see link below for presentation). Per Anadarko, current activity levels result in a 1 to 2 BCFD supply growth - not much at all (less than the balancing item for AGA gas storage for the first 5 months of this year) and "THE DOWNSIDE FOR THE GAS PRICE HAS COME PRIMARILY FROM WEAKENING DEMAND, NOT FROM BURGEONING SUPPLY." (emphasis mine). "... price dip provides signal for demand return.... Switching back from oil to gas would boost gas demand by 3 - 5 Bcf/d. Pollution credits encourage gas use." "In 2001, new wells in U.S. must produce over 8 Bcf/d annual average, to hold production flat." And "Historic drilling activity will lead to production decline." How long will economy be a drag on demand? Will Fed's unprecedented rate cuts and the income tax cuts perk up economy? (first indications this week of manufacturing sector picking up) Another issue is the proper storage level. How long has the 3 TCF been the desired storage level for entering winter and is this still the correct level considering the great increase in demand from NG fired CC plants? Per APC, a 20 year record of 54 GW of gas fired generation scheduled to come on line this year and "35 GW would add 1.3 - 4.5 Bcf/d of gas demand." IMO, the fat lady has not sung yet (although Jim_p says he heard her give three encores. Guess I'll have to get my hearing aid adjusted). media.corporate-ir.net