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

To: Mike from La. who wrote (32396)	12/4/1998 12:20:00 AM
From: Douglas V. Fant	Read Replies (1) \| Respond to of 95453

Mike from LA., I like the service companies like WFT but to be honest from an energy company's perspective, drilling and reworking a well are considered in an equal vein. Yes a rework operation is definitely cheaper en toto onshore, but less so a difference than drilling a well offshore. For the last three days, I have sat in meetings while in my company we have reviewed the economics of every well next year that we intend either to drill or to rework. We will do the operations that make sense from a reservoir conservation/maximization point of view, and which get us the "biggest bang for the buck". It doesn't matter whether it's drilling a well or reworking a well-the rate of return is what counts. Now in having said that there are a minimium of well maintenance activities which need to be conducted to maintain at least some production from a well. But also note- great strides are being made in underbalanced drilling techniques. And these advances make drilling costs/foot drop even more. That is, it is getting cheaper to drill on a per foot basis. That lower cost of drilling should help over the long run make more well proposals economic,and result in more wells being drilled- even if oil prices remain stable.... That doesn't perfectly answer your question but I hope that it helps....And hey I got fried on a couple of short-term Internet plays this week myself. I too am a terrible daytrader... Sincerely, Doug F.