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

To: AltLar who wrote (43733)	5/2/1999 6:26:00 PM
From: Mike from La.	Read Replies (1) \| Respond to of 95453

Larry, Those projections are what caused many to hold on to stocks after the glut started showing last year, thinking the trend would resume shortly. The plunge was just more severe than people projected,however, it seems that the overall trend is returning. We're all familiar with the factors that caused the aberration, OPEC over production, Asian crisis, and warm winters. I wonder if, not only has the trend been reestablished, but has the timetable for reaching world production peak been moved forward as a result of the reactions to the glut. Looking a couple of years down the road, will production again rise faster than demand, or will the cutbacks, shutins, etc, cause a situation in which supply will have a very difficult time keeping up with demand? It seems to me that all the factors have been re-established, growing demand, mature fields, but now we have the after effects of the glut adding to the future imbalance. Hope so anyway, I would love to see long term growth of 5-7 years or forever, in the companies we all know and love. Mike

To: AltLar who wrote (43733)	5/3/1999 12:52:00 AM
From: Douglas V. Fant	Respond to of 95453

Larry, True wildcat exploration discoveries (as compared to infill drilling) are harder to come by nowadays, but with 3D seismic well drilling has gotten a whole lot more precise, assuming you are working with a company that has access to that technology. I think that there will be a capacity overhang from the Middle East for sometime to come, but the "overhang" will drop as a percentage of current daily consumption worldwide moving forward . And it has pretty much dropped continually is my instinct as a percentage of total worldwide production since 1983. While discoveries are harder to come by, exploitation of current fields continually improves. In a really, really good oil field such as a gravity drive oil field one recovers about 55-60% of the oil in place. In an average waterdrive oil field one recovers about 33% of the oil in place- i.e., 2/3 d's of the oil is left in the ground. That leaves an opportunity for better efficiencies for current field recovery- that's where underbalanced drilling, multiple horizontal completions, and radical new exploitation approaches hopefully will provide reserves of oil for the future. This is important as there is no substitute for oil as a transportation fuel right now in the world, particularly as lubricants.... Gas on the other hand with a few LNG project exceptions, is a regional market phenomonon....