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

To: getanewlife who wrote (45323)	5/23/1999 12:49:00 PM
From: PartyTime	Read Replies (1) \| Respond to of 95453

From your Allen Gaines referenced article on natural gas: "...In my next column, I will highlight a few MicroCap natural gas prone producers which should outperform the field." Please do let us know which ones he highlights in his next column. Thanks.

To: getanewlife who wrote (45323)	5/24/1999 1:44:00 AM
From: Douglas V. Fant	Respond to of 95453

Ge Ying Fang, Mr. Gaines article is a good article, but I'd "pick a bone" with a couple of the points he makes in his article. I agree that natural gas storage has increased yet deliverability "behind the pipe" has tailed off over the last 18 months. But Mr. Gaines notes that demand for natural gas tails into the summer season. Well traditionally yes. But things are changing in demand patterns in North America for natural gas as more gas-fired generating units are built. I believe that a new market corollation is developing- a hot summer is as good as a cold winter to spike natural gas demand. Just a hypothesis I posit. Also Mr. Gaines notes that 80% of natural gas production in the Gulf of Mexico comes from wells less than six years old. Well yes, but things are changing significantly due to technology in the industry, and tat means less than he makes of the point. I quote from David Work, Group Vice President of Exploration for BP-Amoco: "Technology is playing a key role in shaping the oil industry. Our wildcat success has gone from 14% to 50% as a result of 3-D seismic, and in Alaska our well cost has dropped from $4.5mm in 1984 to $1.5mm today. Horizontal drilling, multiple laterals, side -tracked wells, and coiled tubing drilling has made the difference. Work also noted that in Trinidad Amoco had been able to find 7 tcf of gas by reprocessing seismic data with new technology." Today's Oil & Gas Journal, Midland Reporter-Telegram. So it takes less wells drilled to locate new reserves or exploit known reserves today than 15 years ago- and also there's yet-to-be -found upside in them thar' old oil & gas fields out there by scrutinizing data in 3-D form. Also Mr. Work did not mention underbalanced drilling another important advancement. So IMO point being that 80% of GOM gas production coming from wells less than 6 years old to me is a neutral fact in and of itself. Maybe just nitpicking possibly, since I agree with Mr. Gaines that the future of natural gas usage is very,very bright and you definitely need to "pick up the pace" in drilling wells to meet rising natural gas demand...