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To: Michael Arrigotti who wrote (1910)	11/12/1997 7:21:00 AM
From: Michael T Currie	Read Replies (1) \| Respond to of 8835

> Not bad when you consider that their profit margin is 97%. You won't find margins like this in any industry except for oil and gas. You certainly will not find such margins in oil and gas under any circumstances, anytime, anywhere. You see, there are these things called well operating expenses which the non-industry types routinely neglect. Folks look at discovery costs, subtract them off the present wellhead price of a barrel of crude or an mcf of gas, and say 'check out those margins'. Average margin on a barrel of crude after taxes, ongoing operating expenses, royalties, overhead and reserves renewal is $4-5 (i.e. 20% or so at current oil prices). Do not be mislead by the apparent profitibility of hydrocarbon production. Mike