Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: WWS who wrote (25460)	9/6/2003 2:56:59 PM
From: quehubo	Respond to of 206085

<<Will conventional production of ngas by on-shore and off-shore producers in N.America increase through 2020 as concluded by EIA, or has conventional production already peaked and now in decline as most of us here probably believe?>> The answer to that question seems totally dependent on how much gas is found on areas where drilling is presently prohibited and how rapid access is given. But for the next 2-3 years production will be declining before access to protected areas can be released and production can be brought on stream.

To: WWS who wrote (25460)	9/7/2003 2:40:09 AM
From: energyplay	Respond to of 206085

The one thing that is likely is that the CBM Coal Bed Methan production will stioll increas - in many cases they are shallow well, under 2000 feet, drillabe lwtih an inexpensive water drilling type rig, of which there are HUGE numbers. HAving got that out of the way, I think the EIA is sitting in Washington using economic models that assume deamnd response to supply. Increasing convetional drill will take a lot more working rigs and crews. There's lots of reserves in Barnett Shale, but hat requires a pretty good rig and high tech frac technology - whose going to be willing to make those investments ? Devon DVN might, since they have lots of Barnett Shale leases....but they may plan to use that investmetn over a number of years, so thay may not go too far. **********

To: WWS who wrote (25460)	9/7/2003 3:05:47 AM
From: energyplay	Read Replies (3) \| Respond to of 206085

Chicken and Egg problem - Okay, say you run a small E&P company, and you drill in Texas, Colorado and sometimes a few other places.... You have some marginal in field properties in an older area of Colorado. The wells make economic sense if the LOCAL price of gas is over $3.10. Inital production should be about 1 to 1.5 mmcf/day. Right now the price is $3.50, and likely to go higher... But, you are less that 20 miles from the edge Jackalope National Forest. There are several natural gas areas near the Forest, where the well have a history of producing over 10 mmcf/day, sometimes 20 mmcf. There are only two nearby pipelines, and they have about 150 mmcf/day spare capacity. Now here's what can happen ... Sceanario #1 A Democrate gets elected president or GWB gets re-elected but loose even more of the Seante and house to the Democrates. Price of natural gas stays high, there is no drilling in Jackalope, but lots of talk. You are getting $4.10 mcf and life is good...your banker takes you to lunch . Sceanario #2 George W gets re-elected and both the Senate and Congress are now controlled by Republicans and pro-business Democrates. Jackalope National Forest is thrown open for drilling . In one year, there are 24 new wells, producing over 200 mmcf per day. A new pipeline is planned, but right now your price is $2.20 mmcdf. and your number of mcf is restricted. Oh, and there is also a $0.20 mcf compression fee.... ***** I think while there is a possiblity that very low cost / high prodcuion areas will be opened up in the lower 48, many of the high cost projects will stay on hold, at least until after the 2004 election... This is contraty to expected economic behaviour, which I think is what DOE?EIA models. I also don't think the futures strip prices of natural gas really relfect this risk. I thik the futures strip tend to center on the most probalble events. Comment invited, I'm sure I got a lot wrong...