Alan von Altendorf

Oil Price Resilience in Doubt for 2010

Thanks, Jeep. Delineation wells are supposed to find oil-water contact to pin down exact size of a reservoir. I saw a headline about the appraisal well. You're right, they'll have to redraw some maps. It's fairly common for interpreters and managers to over-estimate what they think they see in seismic. Appraisal wells are important, but the uncertainty doesn't end until you start to produce.

Oil Price Resilience in Doubt for 2010

I see OPEC as a broken institution, unable to restrain Angola or any other member country that produces over quota. Kuwait and Iran are not attending the Luanda meeting. Saudi Arabia is struggling to keep production from falling below that of Russia, another colossus facing steep decline. Venezeula and Mexico are shorting their own crude.

The only thing that matters is war risk in the Gulf, which has nowhere to go but up.

That's the strategic reality that explains Devon and Shell selling assets, Exxon bidding up XTO and Kosmos, price no object.

Thinking of Going Long Oil? Here's What to Consider

I raised my outlook for Q1 to $150 barrel on war risk.

Devon Energy: Another Unlikely Buyout Target

Flight to safety in US jurisdiction, territorial waters, etc.

Exxon’s XTO Acquisition Sends Bullish Signal on Natural Gas

45 tcf is 50 percent hot air. The majors have to tread carefully to avoid antitrust. I find it difficult to believe that management is planning any further than short term share price and golden parachutes.

Exxon-XTO Deal: Majors to Grow Reserves Through Natural Gas Acquisitions

Acquiring reserves by M&A is a dead end. Think about it, no new reserves were created, and XTO is selling blue sky "more probable than not" present value at a big premium. Absolutely it's a good deal for XTO insiders, a strategic blunder by XOM, like Gregor rightly says floundering around with today's cash flow and no plan for the future.

What this deal and the drama in Ghana reveals is the paucity of oil exploration opportunities. Raising my long range forecast 2011-12 to $120 barrel.

A Tale of Two Nations: What the U.S. Can Learn from the U.K.

I remember the Triumph TR3 fondly, but that's beside the point. UK never fully recovered from 60s socialism (NHS, JobSeeker dole, free university tuition, free housing). Dysfunctional monopoly Post Office, BR and BP were partially privatised, fair enough, but were leapfrogged by free market entrants with better solutions (cell phones, foreign cars, low fare airlines, US oilfield "partners").

You're quite right about the predictable outcome of nationalization of American carmakers, of course, and arguably FME and AIG.

I question the US GDP chart, however. Federal, state and local outlays are over 40% of nominal "output" and destined to go much higher when inflation kicks in. See mwhodges.home.att.net/...

Revealing Halliburton's Treuhand

I think it was a mistake to publish this.

Non-Farm Payrolls: Shockingly Good News

"improvement in the unemployment rate was largely due to people dropping off the radar of the government as their benefits run out" [Jesse's Cafe Americain]

The upside surprise in nonfarm payrolls today is the second-biggest this year (in June, expectations were for -520K jobs and the actual number came in at -345K), and among the biggest expectations "beats" in the past 10 years.

"improvement in the unemployment rate was largely due to people dropping off the radar of the government as their benefits run out" [Jesse's Cafe Americain]

The Difference Between Oil Shale and Shale Oil

Good article, except for implied Bakken growth.

The Oil Casino: SEC Heading for Monte Carlo, Part III

I regret that this technical question came up, but it illustrates why I warned about SEC-sanctioned "proprietary technology." Seismic data consists of peak-and-trough acoustic reflections and shear waves that can be viewed in a variety of stacks (near, mid, far offsets).

You can filter and calculate "attributes" like Amplitude Versus Offset, which some software users claim yields direct indication of oil & gas saturation.

It doesn't. Rock properties and fluid contacts cannot be proven by seismic response. You need well data tied to seismic, LKH, cores, geochemistry, dipmeters, fault penetration, velocity modelling, and depth migration to estimate reservoir character and areal extent.

The Oil Casino: SEC Heading for Monte Carlo, Part III

Downdip fit of seismic amplitude suggests you found a location to drill a delineation well, the purpose of which is to find the oil-water contact (Lowest Known Hydrocarbon). Barring obvious faulting or compartmentalization, you can book proved reserves. But you need the oil-water contact or otherwise it's pulling numbers out of your butt, ne c'est pas?

The Oil Casino: SEC Heading for Monte Carlo, Part III

@billf921 - Certainly production counts, but you have to look at sunk cost to get a feel for payback. Let's say hypothetically that I promise a program of work in order to get an exploration permit somewhere in Africa, then float some shares, hire a rig, announce a discovery and get a third party 'competent person' to estimate possible reserves. I'm out of pocket a few million, no production yet. Speculative investment. We sell 1/2 interest in the block to another company, drill a couple more wells and announce "drill stem tests" of 7000 barrels per day. Still no production as such. This can go on for years.

The SEC Surrenders to the Oil Industry

Just in, email from a pal at Bloomberg: "PDVSA won't even tell us what level of assessment they get from Ryder Scott to justify their claims of original oil in place, from which they automatically certify 20% as proved reserves."