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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: quehubo who wrote (23159)	5/29/2003 6:11:38 PM
From: Wyätt Gwyön	Read Replies (2) \| Respond to of 206085

re fuel switching, another interesting point i read the other day was that there may be preference for NG over oil due to relationship between all-in costs and pass-throughs. specifically, many providers can pass through higher NG costs, but cannot pass through the higher maintenance costs of oil-based equipment. so on an apples-to-apples basis, NG is cheaper when pass-throughs are considered. does this sound correct? and does this account for your NG floor of 10% above #2 oil?

To: quehubo who wrote (23159)	5/29/2003 9:15:44 PM
From: jim_p	Read Replies (2) \| Respond to of 206085

Que, I feel that both supply will increase more than expected and demand will fall more than expected. I own very small non-operated interests in over 1000 wells mostly in the Southeast, and this month is a record volume for me with no increase in drilling. When prices are higher, operators find ways to maximize production from existing fields. Cash prices are also a lot higher than spot prices. March production had a number of fields that received over $9.00 per Mcf for me. Don't forget the impact of flush production. With increased frac technology many wells will now recover 30-50% of the total reserves of the well in the first 12 months and with increased seismic technology more wells will drain a higher percentage of the field by locating the well in the optimum location. Many here talk about the accelerated depletion as a result of increased technology, but don't lose site of the fact that all of that increased depletion will equate to increased flush production in the first 12 months of a new wells life. Jim