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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Broken_Clock who wrote (18693)	4/12/1998 10:55:00 AM
From: seadust	Read Replies (1) \| Respond to of 95453

Re: Texas State Leases *** PK-- I don't know if you got your answer on Teddys' post about water depths on Texas leases yet, as I'm just catching up on posts from Friday. I live on the Texas coast on Mustang Is. off Corpus Christi. All Texas offshore leases would be confined to Texas state waters which run to nine (9) nautical miles offshore. The deepest waters in this range would be no more than 20 fathoms (120 feet) deep. Hope this answers your questions and is of some help. Regards, WK <eom>

To: Broken_Clock who wrote (18693)	4/12/1998 9:24:00 PM
From: Teddy	Read Replies (2) \| Respond to of 95453

ALL: check out this ARTICLE (It's really long, so you might jump right to the end and read the part i bolded first. The guy that wrote this thinks way too much.) How many rigs will be needed to explore and develop this acreage? Such predictions are notoriously difficult to make; any number of variables can be plugged into or subtracted from the equation, depending on the results desired. However, we can build a simple case on a little historical data, averaged and rounded for this exercise. For this purpose, we assume that recent softness in world oil prices will not negatively impact Gulf of Mexico deep water exploration and development over the longer term. On average, about 25 percent of all Gulf of Mexico leases are drilled. If that average is applied to the 3,162 currently active undrilled deep water leases, then we can expect at least 790 of these leases to see exploration drilling before they expire. The average length of the deep water exploration wells drilled to date in the U.S. Gulf is 80 days. To drill 790, 80-day wells will require approximately 173 rig-years, supplied within the time constraints of the lease terms. The average length of time remaining on the currently undrilled active leases is seven years. To supply the 173 required rig-years over the average available time to drill implies demand for 25 mobile rigs for exploratory work alone, and this at 100 percent utilization. Reviewing other historical relationships allows an estimate of the additional drilling capacity that might be required for deepwater development activities. According to data supplied by the Offshore Oil Scouts Association, the average success rate for exploration drilling in the Gulf of Mexico since 1986 has been 38 percent. Applied to our hypothetical 790 wells, this yields approximately 300 successful discovery wells in deep water. The Oil Scouts' data also indicates that approximately six development wells are drilled for every successful exploration well, implying that 1,800 development wells could be drilled during and beyond the time frame of the deep water exploration scenario presented above. The average deep water Gulf of Mexico development well historically has required 106 days to drill. The 1,800 hypothetical wells in this exercise therefore would require about 523 rig-years to drill. Assuming development work lasts no more than three years beyond the average seven years available to drill (giving a nice, round 10 years to work with), the combined demand, 173 rig-years for exploration and 523 rig-years for development work, implies demand enough in the U.S. Gulf of Mexico for about 70 deep water rigs working at 100 percent utilization for the next 10 years. Including both those deep water units working in the region on long-term contracts and rigs under construction specifically for Gulf of Mexico work, the Gulf's deep water fleet numbers 41 rigs, leaving a potential shortfall under this scenario of at least 29 deep water rigs. Teddy's note: i just found that in the middle of a long thing in Offshore Data and i copied and pasted it. I have no way of telling if any of the numbers are right, and didn't even bother to check the math. Mavis, could you look into this for me?