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

To: profile_14 who wrote (39963)	3/9/2005 2:03:17 PM
From: jim_p	Read Replies (5) \| Respond to of 206316

Steel companies got hammered yesterday on fears of increasing supply and a slow down in guess where...........China??? Lets see now.....who else would be effected by a slow down in China????? What to do....what to do??? Oil up today on building inventories, and the OSX being sold out by the smart money as the mullets get sucked in at the tail in of the cycle. Jim

To: profile_14 who wrote (39963)	3/9/2005 2:09:29 PM
From: ChanceIs	Read Replies (1) \| Respond to of 206316

I remember reading some time ago in one of Patterson's annual reports that when things were bad, they did turnkey drilling - basically completeing the well at a fixed cost. In moderate times, they got paid by the foot, and in really good times, (today) they get paid by the hour (or per unit time). The number of rigs drilling, and wells drilled didn't change much between 1970 and 2004. The depth increased in excess of 20%, and the success rate went through the roof. It would be very hard to compare the economics of the two times without knowing the terms - completion vice hourly charge during the two times. One would suppose that the E&Ps would be happy given the higher success rate, but unhappy given the greater requisite depth. I would think that the cost of drilling would have dropped with technological improvements - not to be confused with improvements with discovery technology - seismic. Drilling deeper has to be more expensive with greater depth more friction, power, heat, mud, and bit replacement time. Matt Simmons has an interesting and classic article (circa 1997) on his website detailing how the drillers will make out in the long run. The E&Ps have no choice but to drill, and the pool of drillers is shrinking. The E&Ps may or may not be able to pass on the drilling costs.