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

To: gmccon who wrote (32378)	12/4/1998 12:05:00 AM
From: Douglas V. Fant	Respond to of 95453

gmccon, there are software packages that all energy companies use, which allow you to calculate quickly rates of return on drilling or rework projects. So it is quite easy to take the marginally profitable oil projects off of the table during pricing downturns. Total excess OPEC capacity has stayed in absolute terms about the same for the last 15 years about 6-10mm/bbls/day of excess lifting capacity. But absolute world usage has grown into the 73mm/bbls/day range. Current anticiapted excess capacity of 6-7mm/bbls/day is about 10% of current world usage- not a large number. So if you have projects taken off the table in the US, Latin America, and the North Sea, then that should tighten markets as soon as Asian demand ticks upward.... Sincerely, Doug F.