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Gold/Mining/Energy : Lundin Oil (LOILY, LOILB Sweden) -- Ignore unavailable to you. Want to Upgrade?

To: Tommaso who wrote (602)	5/28/1998 7:37:00 PM
From: Tomas	Read Replies (2) \| Respond to of 2742

Falklands oil shares hit as Amerada quits (The Independent, May 29) The Falklands Islands oil boom was punctured yesterday, knocking over 30 per cent off the value of shares in Desire Petroleum quoted on the London stock market. Other companies with interests in the Falklands were also marked down. Oil group Lasmo saw its shares dip 1p to 294.5p while the port and hotel operator Falkland Islands dropped 21p to 179p. The south Atlantic bubble burst late Wednesday night when Amerada Hess, announced it was abandoning the first well in the region. Amerada Hess said it had encountered traces of hydrocarbons but added: "Appraisal showed that these were not present in commercial quantities." The well 14/09-1 in tranch A of the North Falklands Basin has been plugged and abandoned. Amerada Hess will move back into its acreage in the last quarter of the year. Meanwhile the rig is being passed on to Shell, which will start its own exploration drilling programme immediately. Shares in Desire, launched at the turn of the year at 125p, had risen to 495p on the back of feverish speculation that Amerada's drilling rig, Borgny Dolphin, had hit oil. Yesterday shares in Desire closed at 260p. The Desire share roller-coaster had started on 19 May. Although management urged caution, its shares rose 24 per cent that day on speculation that Amerada had found signs of hydrocarbons. Analysts said yesterday that finding anything at all was encouraging but oil shows did not in themself prove the Falklands to be an interesting area for exploration. They pointed out that even in proven oil provinces like deepwater Gulf of Mexico, the success rate on wells drilled was only one in four. For unexplored areas like the Falklands it was one in 10. Alan Marshall, energy analyst with Robert Fleming, said it could take up to 20 wells to really know where one stood. "We are no further forward really in terms of the Falklands being an oil province. Certain shares were over-hyped. It was like the bad old days when the charactaristics of the sector were seen as highly speculative." Desire was established specifically to take advantage of interest in the South Atlantic. The fact that it has former Clyde Petroleum chief, Dr Colin Phipps, associated with it lent it credibility with investors. Other speculative companies have also been formed, including Sodra, established by Adolf H. Lundin whose International Petroleum Corporation is quoted in Sweden and Canada. There were four blocks offered by the Falkland Islands government as part of its first round licensing round. Oil companies have agreed to share the costs of keeping the semi-submersible rig in the area. The licensing has caused political friction with Argentina which recently warned it planned to levy its own tax on any oil that was produced in the region. The enthusiasm for drilling in new areas has partly diminished because of the slump in the price of oil. independent.co.uk

To: Tommaso who wrote (602)	5/28/1998 10:20:00 PM
From: Tomas	Read Replies (1) \| Respond to of 2742

The well has proved that there is oil in the Falklands Troubled waters over Falklands black gold Electronic Telegraph, May 29 FUNNY stuff, oil. It takes millions of years to turn into black gold and then suddenly disappears. Falkland Islanders were yesterday coming to terms with the disappointment of not finding instant riches after Amerada Hess discovered that the oil it was hoping to find 9,000ft below the seabed had migrated. This is not unusual in frontier exploration. In the early days of the North Sea, the success rate was one commercial find for every 15 wells. Even when the geological jigsaw puzzle was better fitted together, the drillers could still only manage one in six. The well has proved that there is oil in the Falklands. Whether it exists in commercial quantities is another matter. Despite the technological improvements since the Argyll field became the North Sea's first commercial find 30 years ago, there is only so much that can be found out without actually drilling. In deep water on the edge of the world, this is an expensive business. Add in a depressed oil price, and only the biggest finds will be worth exploiting. The share price of Desire Petroleum - named after the ship that discovered the Falklands in 1592 - reflects this wild uncertainty. It has the biggest exploration exposure, and may yet repay the faith of its fans, but the odds are against it. The history of the North Sea shows that the international oil companies are the long-term winners. The construction companies, insurance groups and other outsiders who piled in, encouraged by a government anxious to keep the oil as British as possible, have long since sold out. Some - including Associated Newspapers, with its share of Argyll - made money, but most did not, and very few turned a small stake into a lottery-sized win. Desire and the other Falklands minnows will struggle to produce the funds needed to pay their way in the world's most expensive poker game. One of them may turn into the Falklands version of Lasmo, but big oil will do its best to ensure that the cards are stacked against them. telegraph.co.uk:80/et?ac=000853717812049&rtmo=0KGbbXxq&atmo=99999999&pg=/et/98/5/29/cncom29.html