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

To: Tomas who wrote (846)	11/20/1998 11:03:00 PM
From: Tomas	Respond to of 2742

The Falklands: Shell caps well. The Times, Saturday SHELL has abandoned another oil well in the Falkland Islands, delivering a further blow to the hopes of islanders that a pot of black gold lay beneath their territorial waters. Shell Petroleum Development said yesterday that it had plugged and abandoned Fitzroy-1, an exploration well drilled in partnership with AGIP-ENI in the North Falkland Basin. Shell said that drilling had encountered hydrocarbons but no commercial volumes were found. The disappointment at Fitzroy-1 follows the abandonment earlier this year of Sebald-1A, another Shell exploration well.

To: Tomas who wrote (846)	11/20/1998 11:07:00 PM
From: Aggie	Read Replies (2) \| Respond to of 2742

Tomas, hello 6 wells and no gushers. Gee, let's give up and go back to roofing. But first, the numbers. 140 million barrels, minimum required to ante up? What? Figure 3000 m average well depth, at $150K/day average operating spread cost for a floater in remote areas. Average cost/well: $4.5 million. I've operated in extremely remote areas for this cost, it's not unreasonable. And 30 days for a 3000 m well is also not unreasonable. Add the same amount again for casing and wellheads and rig mob/demob, you get an average well cost of $9.0 million. That's reasonable. $20-25 million/well? What for? The steep part of the learning curve should be behind these guys by now. No,no. Give me a field of 40 million STB, some subsea completions, and a FPSO and there will be a profit. If they've found oil and gas shows, source rock, and favorable reservoir rock, then they'll be back. Now it's time for another round of 3-D seismic, 1 - 2 years of processing and interpretation, a few non-chalant additional acreage acquisitions, and (with oil back around $18/bbl) aggressive drilling by 2001. I'll bet you a cold beer the parties involved are keeping rueful smiles plastered firmly in place while kicking each other under the table. Best of Luck Aggie