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 : KERM'S KORNER -- Ignore unavailable to you. Want to Upgrade?

To: Kerm Yerman who wrote (13093)	10/30/1998 8:36:00 AM
From: Kerm Yerman	Read Replies (1) \| Respond to of 15196

IN THE NEWS / Oil Battle Brews Over Pristine Canada Pacific Coast VANCOUVER, Oct 29 - A battle is brewing over whether to end a 1972 moratorium on drilling for oil and natural gas off Canada's Pacific Coast after a recent geological report that said deposits in the region may be far bigger than previously thought. Geologists have known for years there are potentially vast oil and natural gas deposits off British Columbia. Chevron Canada Resources Ltd. <CHV.N> , Shell Canada Ltd. <SHC.TO>. and Petro-Canada <PCA.TO> have held drilling rights in the region since the early 1970s. A recent Geological Survey of Canada report said the deposits -- especially around the Queen Charlotte Islands -- could be far larger than previously thought. Preliminary data indicated there could be up to 9.8 billion barrels of oil and 1,228 billion cubic meters of gas in the area, although geologists stressed economic factors will limit how much can be recovered. Officials are in no rush to drop the drilling moratorium off Canada's Pacific Coast, adopted more than 25 years ago and renewed after oil spills like the one by the Exxon Valdez tanker in Alaska in 1989. But they acknowledged that there are calls for a change. The pressure comes mainly from coastal business interests struggling to cope with the decline of British Columbia's fishing, mining and timber industries. Western Canadian businesses are now looking with envy at promising oil and gas exploration now underway off Canada's Atlantic coast. "People, if they see some hope, they can hang on. Right now they see no hope," said David McGuigan, a Prince Rupert banker who heads the North Coast Oil and Gas Task Force, which is lobbying for an end to the drilling ban. The Prince Rupert region has been hard hit by lumber mill closures and its salmon fleet forced to tie up because of depleted stocks. Tapping the energy resource would help revitalize the moribund economy just as it is now doing in Newfoundland. The moratorium on drilling and exploration off Canada's Pacific Coast was adopted because of concern about protecting the largely pristine coastline from the environmental dangers of oil being shipped to the United States mainland from Alaska. Canadian officials considered lifting the ban in the 1980s, but the idea died amid a public outcry over a series of international oil spills and tanker accidents, including the Exxon Valdez disaster. British Columbia Minister of Energy and Mines Dan Miller acknowledged he has discussed the issue "with quite a number of British Columbians," but was quick to add: "But we've not arrived at any conclusions." "We have no particular timetable for moving forward. I think it is a topic that needs to have a bit of a public discussion." said Miller. Environments have significant political weight in the province's left-leaning New Democratic government, and one group has already dismissed the proposal as "economically misguided and environmentally dangerous." "We held this debate 20 years ago and made the right decision then not to endanger our coasts. To go back and revisit that decision now is unnecessary," said David Cadman, president of the Society Promoting Environmental Conservation. "Environmental objections are a given in British Columbia," countered McGuigan. Drilling supporters contend that the technology to protect the environment has improved since the ban was implemented and been proved on Canada's Atlantic coast and Arctic where the weather and drilling conditions are tougher. "If (British Columbia officials) have concerns, don't they have any confidence in the judgment in of their peers in Newfoundland and Nova Scotia when they made their judgment?" McGuigan asked hypothetically. The pro-drilling task force also wants to follow eastern Canada's lead in requiring the oil industry to invest in local communities. One proposal would establish a trust fund to spur other economic development in northern British Columbia. Miller said the province is aware "there are millions of dollars flowing in Atlantic Canada (from) offshore," but will not "compromise the marine environment" and needs to know there is public support for lifting the ban.

To: Kerm Yerman who wrote (13093)	10/30/1998 8:38:00 AM
From: Kerm Yerman	Respond to of 15196

IN THE NEWS / Canada's Renaissance Energy Posts Quarterly Loss CALGARY, Oct 29 - Renaissance Energy Ltd. <RES.TO>, Canada's eighth-largest oil and gas producer, said on Thursday third-quarter declines in its earnings, cash flow and capital spending had masked the beginning of a turnaround for the company. "We're a business that has a 10-year inventory, so we can't necessarily react on a quarter-to-quarter basis," Renaissance Chief Executive Clayton Woitas told Reuters. "The business environment is very positive. The basic components started to turn in the second quarter." Calgary-based Renaissance posted a third-quarter net loss of C$3 million, or C$0.02 a share, versus a profit of C$21 million or C$0.18 a share in the same period of 1997. Cash flow for the quarter fell 14 percent to C$102 million from C$119 million. Because the company acquired Pinnacle Resources Ltd. in July by issuing 27 million shares, its cash flow per share fell more than 30 percent, to C$0.71 from a year-earlier C$1.02. Capital spending fell more than 70 percent in the third quarter, to C$69 million from C$235 million, its lowest level since 1992. Oil production rose 19 percent to 97,703 barrels a day from 82,274 barrels a day in 1997. Natural gasproduction was up 24 percent to 519 million cubic feet a day from 420 million cubic feet a day. However, excluding production added by the Pinnacle acquisition, oil production fell 12 percent to 72,563 barrels a day and gas production was off four percent to 403 million cubic feet a day. Renaissance is counting on lower costs, strong natural gas and improved crude oil prices, and narrow price spreads between Canadian crude blends and benchmark West Texas Intermediate to post better results for the fourth quarter of 1998 and into 1999, Woitas said. The company expects to post a profit in the fourth quarter, he said, but does not anticipate topping 1997 fourth-quarter results unless oil prices improve before the end of the year. Woitas also said Renaissance, one of Canada's most active drillers, will drill 800-850 wells this year and 1,000-1,200 wells in 1999, depending primarily on the strength of oil prices. A key aspect of the company's strategy for 1999 is locking in the spread between its medium-gravity oil sales price and West Texas Intermediate at US$3.35-3.75 a barrel on 20,000 barrels a day with several refiners, he said. "Once we get some positive signs on WTI -- US$16-US$17 sustainable gives us a very healthy realized oil price -- it would cause us to aggressively step up our oil development program," Woitas said. "They seem to be getting themselves in a position to take advantage of higher gas prices and also be extremely well-positioned for when, inevitably, oil prices get better," said Craig Langpap, an analyst at Calgary-based brokerage Peters & Co. Ltd. Renaissance shares were down C$0.40 to C$20.35 in moderate volume on the Toronto Stock Exchange on Thursday.

To: Kerm Yerman who wrote (13093)	10/30/1998 9:00:00 AM
From: Kerm Yerman	Respond to of 15196

IN THE NEWS/ 10/30 05:15 Collapsing Costs Hammer Oil Drilling Business LONDON, Oct 30 - Oil's drilling business faces a torrid period as the petroleum price depression freezes exploration ambitions and devastates rig hire rates, analysts said on Friday. "Demand, rates and utilisation are all heading downwards and are likely to get substantially worse before they get better," said Ruairidh Stewart of Aberdeen-based consultants Petrodata. The whole upstream oil industry is taking increasing punishment from an oil market slump that has anchored crude prices near decade lows for much of this year. So far, the most dramatic impact has been in the Gulf of Mexico, where rig contracts are short-term and so react especially quickly to a change in oil price direction. Gulf of Mexico rig rents are now as much as 66 percent cheaper than they were six months ago, driven down as ever more rigs become idle. And as oil companies tighten their exploration belts, regions with longer rig contracts are starting to suffer the same pain. Only 76 exploration wells have been drilled in northwest Europe this year, compared with 115 in the same period in 1997, according to consultants Arthur Andersen. Appraisal wells are down a third too. The exploration drought means North Sea semi-submersible hire rates are now at least a third lower than six months ago, according to Petrodata. September saw the sharpest fall yet. This year's trend is an abrupt about-face from the last two years, when high oil prices encouraged bold drilling plans. Then the problem was scarce rigs and rocketing rates. That heavy demand meant operators were forced into long-term hiring agreements they have now come to regret. Many are now having to scout around for subletting opportunities after deciding not to go ahead with planned drilling work. The multitude of subletting options means that any potential explorers can bargain even harder on rig rates, as well as being able to secure shorter contracts. And rates are likely to deteriorate further as the relentless price weakness encourages firms to slice exploration budgets for next year. "While we can expect projects committed to go ahead, the larger risk/reward exploration programmes will be held back until cash flow and oil prices improve," Petrodata's Stewart said.

To: Kerm Yerman who wrote (13093)	10/30/1998 9:17:00 AM
From: Kerm Yerman	Read Replies (1) \| Respond to of 15196

IN THE NEWS / Kazakh Woes Force Hurricane Hydrocarbons <HHLa.TO> Oil Output Cut ALMATY, Oct 30 - Canadian oil company Hurricane Hydrocarbons Ltd said on Friday it has been forced to cut oil production at its Kumkol deposits in Kazakhstan because of a breakdown in relations with the Chimkent oil refinery. Keith McCrae, president of Hurricane Kumkol Munai OJSC, Hurricane's Kazakh arm, said output from joint venture partners had fallen to around 7,000 tonnes per day from 9,500 tonnes. "We were producing approximately 9,500 tonnes of oil, and this went down to 7,000 tonnes under the restricted mode," he told a news briefing in Kazakhstan's commercial capital. "That restriction came at the end of June." Output from the joint venture partners is currently only 2,000 tonnes per day, but that was due to scheduled refinery maintainance at the Chimkent plant, he added. Hurricane has accused the Chimkent refinery of charging too much to process crude, delaying shipments of products to customers, failure to honour payment terms agreed for oil contracts and from trying to monopolise oil refining. Chimkent officials were not immediately available for comment. The Kumkol oilfield complex in southern Kazakhstan is linked by pipeline to Chimkent and delivering crude to alternative buyers is complex and costly. McCrae said that Hurricane was looking to deliver oil to Turkmenistan's Chardzhou refinery, and had plans to deliver to China once the Druzhba rail terminal on the Sino-Kazakh border was completed. This would not be until spring next year. He did not rule out a complete closure of production at Kumkol if relations with Chimkent failed to improve. "If it (the refinery) were not to buy any crude from us, our whole oilfield operation would in fact be shut down," he said. "I don't consider that to be a real possibility, but it's one extreme which shows you what the level of concern is." Hurricane acquired the former state oil company Yuzhneftegaz in 1996 and has built up production levels and made a major contribution to the local budget of the Kyzyl Orda region where the fields are located. The company committed to making capital investment of $280 million over six years and within two years had achieved over half that total, he said. McCrae said the Kazakh government should help settle Hurricane's dispute, because the oil-rich former Soviet republic was in a strong position to win other foreign investors to the energy sector now that Russia's economy was in crisis. "This should be seen as an opportunity, not a disaster." Hurricane shares Kumkol North, its main producing asset, with Russia's oil major LUKoil <LKOH.RTS> on a 50-50 basis. The spat with Chimkent threatens to scupper Hurricane's ambitious expansion plans at the Kumkol oil producing region.