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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: crustyoldprospector who wrote (20539)	10/21/2002 7:31:43 PM
From: Douglas V. Fant	Respond to of 36161

On offshore Nova Scotia: Report Boosts Estimates of Nova Scotia’s Offshore Resources, But Region Badly Needs New Discovery Article by Ian McKinnon Abstract: A new report on the potential of deepwater offshore Nova Scotia is long on speculation but short on hard evidence that will cause producers to spend more money on expensive exploration in the province’s portion of the Atlantic Ocean. Analysis: A new report on the potential of deepwater offshore Nova Scotia is long on speculation but short on hard evidence that will cause producers to spend more money on expensive exploration in the province’s portion of the Atlantic Ocean. After more than a year of work, the Canada-Nova Scotia Offshore Petroleum Board (CNSOPB) recently released its assessment of the hydrocarbon potential of the Scotian Slope. The conclusions doubled the gas potential and tripled the oil potential of Nova Scotia’s offshore resources. The board, a joint provincial-federal agency that supervises oil and gas operations offshore Nova Scotia, decided last September to provide reserve estimates for the Scotian Slope because of increasing interest in the region. The Scotian Slope basically covers a 60-mile-wide (100-kilometer) escarpment that descends eastward from the edge of the continental shelf to the Atlantic Ocean. It lies in water ranging in depths from 650 to 13,100 feet (200 to 4,000 meters) and extends 510 miles (850 kilometers) from the U.S. border in the southwest to Newfoundland’s provincial border on the northeast. No assessment of the 31,000-square-mile (80,000-square-kilometer) region had previously been made. A 1983 study by the Geological Survey of Canada estimated the Scotian Shelf’s total gas reserves (discovered plus potential) amounted to 18 trillion cubic feet (tcf). The same decades-old assessment pegged oil and gas liquids at 1 billion barrels for the shallower waters. The CNSOPB wanted to revisit the figures in light of EnCana Corp.’s Deep Panuke discovery, estimated to contain 1.1 trillion cubic feet of gas, plus tremendous successes in other deepwater basins in the Gulf of Mexico (GOM), offshore Brazil, and West-Central Africa. The Atlantic-facing, lookalike basins were used as analogs to help board staff and consultants come up with the new figures, although volumetric parameters, oil/gas ratios, and other factors used local data wherever possible. For example, porosity was estimated at between 10 and 25 percent while deep wells in the GOM, which has younger sands, often encounter porosity in the 30 percent range. The CNSOPB said the Scotian Slope was similar to the GOM and other analog basins because it has supra-salt, inter-salt, and sub-salt plays. The study looked at 12 different play types, concluding that 86 percent of the reserves could be found in the top six plays. The highest-rated plays were turbidite fans lying on the floors and flanks of inter-salt mini-basins and “upper slope turbidite fans in a structured regime associated with listric down-to-basin faults and salt features.” Sub-salt plays were assigned a lower probability of success, although the report noted poorer seismic data quality influenced the rankings. (The full document, which runs more than 100 pages, as well as a much shorter executive summary can be found at the CNSOPB website, www.cnsopb.ns.ca, under the news releases section of the “what’s new” category.) The analysis concluded the Scotian Slope could contain between 15 and 41 tcf of gas, depending on assumptions used. The oil potential was estimated at between two billion and five billion barrels (plus several tcf of associated gas). The report contains both good and bad news for Nova Scotia, which has been counting on the petroleum industry to transform it from a “have-not” into a “have” province. The happy face comes from the assessment putting the Scotian Slope, on a hydrocarbon richness per unit basis, on about the same level as other Canadian frontier basins, such as the Beaufort in the Far North. The bad news is that it still ranks below proven areas such as the GOM and offshore Brazil. For example, the ultimate recovery of the federal offshore portion of the GOM has been estimated to contain 60 billion barrels of oil and 428 tcf of gas. The conclusion pours some cold water on hopes the Scotian Shelf, where producers have committed to spending C1.5 billion over the next few years on exploration and development, will turn into another GOM. Recent deepwater drilling results have been as encouraging as an Iraqi clerk looking at a spoiled ballot in this week’s sham election. Shell Canada and Chevron Canada, for example, spent more than C$170 million this year on two wells that were abandoned. Other companies have also come up empty, although Marathon Oil Corp. reported finding gas in July in 5,600 feet (1,700 meters) of water. It expects to drill up to five more wells over the next two years to determine if the discovery is commercial. The mixed drilling results in the Scotian Slope are especially interesting since deepwater exploration holes have averaged a 30 percent success rate since 1985 as a result of better technology and increased knowledge, the CNSOPB report said. It’s too early to write off Nova Scotia’s hydrocarbon potential. Less than 200 wells have been drilled on the Scotian Shelf and Scotian Slope, compared with an estimated 50,000 wells in the GOM. The region’s proximity to lucrative U.S. Northeast gas markets certainly will keep the exploration dollars flowing for several more years. Unless the budgetary black holes start yielding additional commercial fields, the oil and gas reserves forecast by the CNSOPB’s report could stay in the potential category forever.

To: crustyoldprospector who wrote (20539)	10/21/2002 11:58:13 PM
From: SliderOnTheBlack	Read Replies (7) \| Respond to of 36161

re[".... In chess, it’s called “checkmate.”] ...Bingo ! This move was a classic Inside Wall St -> "Student Body Left" - ESF/PPT heads up prop job - with the "heads up" given to the Pension Fund & Institutional Mgrs to ride the Bond "tail" that wagged the Equity "dog" of this market via the rotational/portfolio re-balancing out of bonds and into stocks - as the ESF/PPT was going to provide plenty of wind behind those bonds to stocks - rotational sails. I thought DOW 8350 would be the fizzle point & it held thru friday and commented that the Bulls shouldn't even dream of dusting of the Pom-Pom's untill 8750 was reached...and it hasn't been as yet. But, Technically speaking; the real cross-point is where the last so called market bottom and "New Bull Market" - rally off of July 23rds closing low of DOW 7702, rolled over and died on Aug. 22nd at DOW 9053. 60 days ago we were at DOW 9053... and now somehow a move back over 8,000 is now a Rally" - a "new" Bull Market ? C'Mon ?!? 9053 needs to be taken out for this DCB to earn the right to be called a "Rally", or more importantly; for anyone to even begin to mouth the words - that the market has turned. I don't have any real dog in this hunt - "yet"... other than re-adding some goldstocks from HUI 95-105. But, when/if the DOW rises above 9000 - I'll eagerly re-deploy a 10-15% short position... as just as Lance Lewis commented: Greenspan indeed traded one bubble for another and the Mortgage Refi game has ended. Fear of Job loss is ramping along with having 401K & Investment accounts whacked for the 3rd consecutive year...and for those workers who thought their retirment wasn't affected because they were part of a defined benefit plan...this Bear became an equal opportunity offender and delivered what will become a headline/cover story in 2003 - The Pension Crisis. The song remains the same ~ War in Iraq, Oil Prices/Crisis, Domestic & Global Terrorism, Ballooning Account Deficit, along with City - State & Fedral Budget revenue collapses, Debt Bubble implosion still ongoing with no end in sight, US $ & foreign investment repatriation risk, the overhang of the Derivatives Crisis and most importantly - the VALUATION issue still remains... Just like the July to Aug 22nd "move" of DOW 7702 to 9053... this too, shall pass. My long-sided broad market "wake up call" is still set for sub 6,000. When, not if... The Global economy is worse, not better. The US Economy is worse, not better...no real change in Cap Ex Spending, or Earnings... prudentbear.com Job Risk/Fear is worse, not better. Mortgage Rates are now and may continue to be; worse, not better. The Risk of ramping Crude Oil Prices, is greater, not less. The Risk of another significant domestic Terrorist Act - is greater, not less. The Account Deficit is greater, not less. ...and again, on any & all conservative accounting basis - this market is still not cheap enough... it's still THE VALUATIONS ~