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

To: BigBull who wrote (43551)	4/29/1999 9:32:00 PM
From: DEER HUNTER	Read Replies (1) \| Respond to of 95453

well....what do ya know about that? ..... interesting article implies lots of room left on the upside....and that's an understatement IMO. Thursday April 29, 8:39 pm Eastern Time Crude price jump tempts drillers back to oil patch By Richard Valdmanis NEW YORK, April 29 (Reuters) - With crude oil prices making a solid recovery from winter's historical lows, some independent U.S. oil producers are warily edging back into the oil patch this spring to make their black gold sprout anew. ''We have a lot of people getting enthused,'' said Daniel Bigs, president of the National Stripper Well Association (NSWA), a Louisiana-based trade group representing more than a thousand small petroleum companies. ''Some of the wells are starting back up, equipment is getting repaired, people are excited. The price surge has given us a lot of hope.'' Independent petroleum companies, which represent more than 40 percent of the U.S. crude production capacity, were hard hit by a severe downturn in oil prices last winter, with about 55 percent of the industry knocked out for lack of profit. With a 60 percent crude price resurgence since February, however, a select few companies, including Lake Forest, Calif.-based Nutek Inc. (NUTK - news), are leading a return by unplugging their wells. Nutek, whose stock is traded on the over-the-counter bulletin board, is located south of Anaheim. ''We are actively working on getting our oil wells back into production,'' said Nutek President Murray Conradie, who announced plans this week to reactivate 25 percent of Nutek's lease holdings. ''With the current oil and gas prices, we must delve into the profit potential.'' Oil prices hit their highest mark in 16 months on the New York Mercantile Exchange (NYMEX) this week at $18.58 a barrel, four months after falling to an all-time low of just under $11 a barrel in December. The price spike is credited largely to an agreement among world oil producers, signed in mid-March, to cut global output by more than two million barrels a day. The break-even crude price for small oil producers in Louisiana, Texas, Oklahoma, and California -- where the majority of small independent companies operate -- averages between $13 and $15 a barrel, according to the NSWA. While the NYMEX surge hints at a solid recovery, the companies charging back to the oil patch are largely regarded as exceptions in the still-ailing industry. ''We're encouraged by the surge, but most of us are waiting for more encouragement before we bolt back in,'' said John Taylor, president of Hiawatha Exploration Co. in Oklahoma, and chairman of the Oklahoma Commission on Marginally Producing Oil and Gas Wells. ''We've been burned badly, and now we're a little wary of whether the prices will hold. Our stats don't show much stirring yet in the fields, because I think if it's happening, it's just starting.'' Trade spokesmen and producers agree, however, that the outlook is good. ''If the prices keep moving the way they've been moving, we'll see that a lot of the guys who had their wells shut-in last year are going to be turning them back on,'' said Don Briggs, spokesman for the Louisiana Independent Oil and Gas Association. ''The business is definitely becoming more profitable.''