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

To: Tomas who wrote (33167)	12/24/1998 7:55:00 AM
From: Tomas	Read Replies (2) \| Respond to of 95453

Big oil price fall won't kill North Sea - report Aberdeen Press and Journal, Wednesday December 23 NORTH Sea oil fields should still make money next year, even with the price of a barrel as low as $9, a study by industry analysts reveals. The report by Wood Mackenzie released yesterday also showed about 93% of next year's production in the British and Norwegian sectors of the North Sea would still be economic with a price of just $7 a barrel. But it said, in contrast with Norway, greater volumes of UK production would start to drop below the point at which a 10% rate of return was achievable with a fall in the long-term of less than $15 a barrel. WoodMac's analysts believe operators will not shut-in any North Sea production in the short-term. Rather, the emphasis of operators is still to maximise production. The UK and Norwegian sectors are forecast to make up about 94% of next year's production in the North Sea, and 73% of gas flows. The progress made by the companies in cost-cutting was also evident in improving the economic robustness of newer field developments, WoodMac's latest report said. The fields best protected against falling oil prices were those in an early phase of production, as well as those which benefit from economies of scale. The Wood Mackenzie report said sustained oil prices next year of over $10 a barrel would eliminate any uneconomic production volumes, reducing the intense pressure on cash flows currently facing oil companies operating in the British sector. pressandjournal.co.uk