Mmarrkk

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

Current SEC rules are over 30 years old I believe and no longer take into account modern technological advances. As they stand now, a company can drill a well in the Barnett Shale and just because it is more than one spacing unit away from an existing producer, it is termed an "exploration" well. Thousands of wells have been drilled in the Barnett and drilling less than 1000 feet from an existing producer and you still have to call it an exploration well and call the resources "unproven"? Get real.

The new rules will be more more "fit for purpose" for reserves engineers. I've done reserves accounting for over 30 years and I fully support the new rules. If anything, they don't go far enough in changing the way we account for reserves.

And, having a lot of reserves doesn't really matter. Its the VALUE behind these reserves. Having 100 million barrels of oil in the oil sands or in a high tax rate state such as certain middle east companies is not the same as having 100 million barrels of oil in the shallow Gulf fo Mexico. Its all about dollars and profit, not barrels.

Why Is Congress Agnostic About Natural Gas?

Right ON Mr. Orr.

Why Is Congress Agnostic About Natural Gas?

Obamma has bigger priorities...free healthcare to his major constituency groups..."cash for clunkers" so that we turn perfectly good, functioning vehicles into scrap...Cap'n'Tax so that we penalize refineries and make greenies happy...raising income and death taxes. He just can't get around to making natural gas a big piece of his grand plan. Plus, no one in his administration has positioned themselves just yet to reap big profits from N.G. Give them some time to load up the boat then he'll push it! Probably waiting on Charlie Rangel and Mr. Geitner to get fully invested and to figure out a way to cheat on their taxes when they make profit!

Seriously, I just don't think he gets it...plus he's still in the pocket of Coal!

Tiber Oilfield Spells Major Upside for Prices

Elliott: Great article with just one item I'd like to take you up on:

"The reserve estimates you often hear quoted in the news are for estimates of original oil in place (OOIP), the total amount of oil contained in the reservoir."

This is incorrect. When someone uses the term "reserve" or "reserves", by definition this is what is recoverable. The word "resource" is used at times to define something less certain.

2020 sounds like a long time from now!!

BP Strikes Oil, Enhances Exploration Potential in Gulf of Mexico

BP and Shell are both creating lots of jobs here in the U.S., are were until we hit this little speed bump known as a recession/depression. But no matter where their stocks are housed and their CEO is housed, both have huge presences in the u.s. and employ thousands here in the U.S. So, if jobs are important, they are employing large numbers. And the exporation work is done here in Houston.

Guess you are worried about Hyundai as well, even if they are building cars in Alabama? Should we change the name? Same employees, same local taxes, payrolls, etc.

BP Strikes Oil, Enhances Exploration Potential in Gulf of Mexico

Uncle: in case you don't know this, BP's office is located in Houston and it is staffed by over 75% Americans. So this is a very American operation. Once the platform is installed, it will be staffed by Americans. And, they pay taxes here in America.

Oil Is Still the Key to U.S. Economic Future

ripskii: increasing pressure on gas lines will increase the capacity a bit but not a huge amount. And there are a lot of problems with increasing the pressure! First, most pipelines operate close to the max operating pressure so there are mechanical/safety issues. Second, in order for the pressure to be increased, there has to be some compression to boost that pressure. Compression takes money and it takes time to build and install. Third, when the pressure increases, it increases the back pressure on the wells that produce into the system. As back pressure increases, the production rates of the wells drops, decreasing the volume produced. So, either overall production will fall or we will have to install more compression. See second concern above!

As storage fills and reaches capacity, you will see the pipeline pressures start to increase all by themselves. This results in "backing out" wells that are lower pressure. Its kind of a natural curtailment to production when we are producing too darned much!


On Aug 04 10:58 AM ripskii wrote:

> Fitz: I've been wondering what the effect of the U.S. gas storage
> capacity reaching the full status will have on the industry production
> and pricing? You can see that current excess production going into
> storage is reaching record proportions. When we reach "full" it will
> also have a big impact on where to store the large increases in LNG
> projects coming on line in the near term. I've read somewhere that
> if present trends continue our capacity will reach full in a a fairly
> short time. I've even heard that capacity can be expanded by increasing
> pressure in the gas lines. Any thoughts on this?
>
> www.americanoilman.com/

Oil Is Still the Key to U.S. Economic Future

Fitz: welcome back!

LNG: once the LNG liquifaction plants and re-gas plants are constructred, those huge capital investments are "sunk costs" and the profitability is based on incremental operating costs. The cost to buy gas in Qatar, liquify it, ship it to the US and re-gas it are very low...in the $2-3 range. Remember, Qatar gas is so plentiful it makes the shale plays look small! So, with a $2-3 cost, yes LNG is competitive. And someone above was right, these LNG plants in the Middle East have contracts that allow/force them to get this gas over to the US market if other markets won't take the LNG.

I think LNG will be a factor, but it won't be a doomsday factor as I once thought and others are thinking. Other markets are starting to improve and will relieve some of the pressure!

Boone's delaying the wind farm project is a very good example of why it will be a long time before wind and solar and other alternative energy supplies are competitive with oil/gasoline/coal/dies... gas. The market just isn't there yet.

Hope...fading. Change...all I have left after taxes! The new Obama as Heath Ledger's Joker poster...priceless! As our Bought-and-Paid-For Congressmen/women and Senators come home for summer recess, let's all make an all out effort to get around to their town hall meetings and give them a piece of our minds. Let them know that energy policy is important and it doesn't look like Crap-And-Trade. That Natural Gas is vital to our future. And that we don't want GM-Chrysler Health Insurance/Healthcare.

How High Will the Price of Oil Go?

The tax complexities of MLP's are highly oversold!! Its not that dang difficult. I own several MLP's and it isn't that big of a deal.

You may want to pull up your research on Linn Energy. They have a sound story and have locked in oil/gas prices through 2011 so their distribution is pretty stable through that period of time. Solid management team and solid assets with locked in prices make it a winner. Risk is probably dollar related.

BP is a great story.

Understand your thesis on why oil can't sustain really really high prices due to substitutes cutting the market and/or demand destruction. Fitz makes a great point regarding some of these substitutes like oil shales...they are nasty on the environment, take a lot of water and will require coorperation from government...all of which mean they won't happen for a while. I'd rather see us tap into natural gas as a fuel substitute either through direct usage (nat gas vehicles) or as a liquid (GTL) but GTL doesn't make sense until oil prices get really high AND nat gas feedstocks stay low. If oil prices are too low OR nat gas prices too high, GTL is a tough economic bet. Too many BTU's used to make not enough BTU's!!

You may want to follow Fitzsimmon's links to his website with his energy policy. He's got some great ideas. He and I differ dramatically on the political spectrum but he's on track with his ideas around energy. He's even coming around to my side of things a little bit regarding the Chosen One. He probably doesn't distrust Obamma as much as me, but he's seeing a lack of progress from him. We need a new energy policy, not a tax the oil/gas company policy. Fitz's is a good place to start.

My Thoughts on Oil

Crocodilian: I have to agree with Fitz on this. Chu is a loser when it comes to energy policy. His concern about diverting nat gas away from power gen, etc. is so outdated its hilarious. Has he checked the gas storage reports lately? Maybe he should start reading those EIA reports every now and then. We have estimates of QUAD's of gas in the Marcellus and Haynesville (not BCF, not TCF but QCF's). Maybe that's getting a bit frothy but the point is we have huge resources. Companies aren't even drilling them right now due to the lack of market demand and storage. Why do you think all of these companies have cut way back on their drilling budgets and some companies are shutting in wells and/or curtailing production?

Chu might be a boy wonder genious scientist, but he's just not very practical nor knowledgable.

I agree with Fitz: Fire Chu Now!! And Fire His Boss Too!!! We can only dream!!!! (sorry Fitz, couldn't pass up a "bash Bobomma" moment).

My Thoughts on Oil

jan300: leaking CO2...if it gets to the water formations we'll call it Perrier and make a killing!!

My Thoughts on Oil

Fitz: agree that Fiat's selling the NGV and that's great. Its just that their legacy doesn't give me a warm fuzzy on quality or meeting the needs. "Fix It Again Tony" was well-deserved! I owned a couple of those little Fiat's way back when. Why two?? Because you had one in the shop on a monthly basis so you needed a spare!!

I'd much prefer the Honda NGV be widely available but they seem to think limiting the market for this is a good idea???

How about Honda buys out GM and starts work on a NGV Suburban, Acadia and/or Silverado? Now there's a product line I could get behind. Of course, that would violate that new CAFE standard edict that will soon be stuffed down our throats or up some other body orifice. But maybe they could build a bunch of those toy cars that someone else could buy and even out the averages! I'm sure not buying those little junksters.

My Thoughts on Oil

Andy1234: Directionally you are right regarding US-based oil/gas companies with respect to falling dollar. However, if you look at international oil/gas companies like BP, Total, Eni, Royal Dutch Shell, etc., they are international companies but sell a product based on the US Dollar (oil). And many of them have costs that are tied to US Dollar as well. So they tend to move in tandem with their US counterparts like XOM, COP, CVX, etc. Plus, the US-based companies all have huge portions of their operations in international locations. XOM has a majority of their income from international sources as do others.

But if you are banking on a collapsing dollar, oil should prosper. And who wouldn't bank on the collapse of the dollar? We are printing greenbacks like toilet paper, our budget has blown up and we now own that crappy company GM in partnership with the villains who put them there...the UAW. The only other more dismal partnership than a US Govt/UAW partnership is the Fiat/Chrysler/UAW partnership...crappy Italian management combined with crappy engineering combined with excessive labor costs!! And with a bunch of marxist gov't officials...can't wait to see their first product off the assembly line. It will probably be a high top tennis shoe sized little clown car that plugs into the wall, gets a bazillion miles to the gallon, but only goes 3 miles and is a rolling casket for anyone in it when it encounters another vehicle...or a bike!

Making Natural Gas Transportation a Reality

WisdomvsInfo and Fitz: One other BIG issue for Asia and CNG vehicles: Asia imports a lot of their natural gas from the Mid East and Australia via LNG. LNG is priced at the oil market in those countries. Makes for a) higher prices and b) higher volatility!

The U.S. is blessed to have huge (huge with capital TCF's) NG resource in the ground. Most of the countries with populations in Asia do not. They also have even less infrastructure than the U.S. for nat gas. India still uses a large amount of LPG in tanks for their home use. Those nice little bottles of gas you use to power your gas grill...just a little bit larger and painted red! CNG will work there but will be more expensive than here.

I did hear yesterday that in those massive 0.5% budget cuts announced, oil and gas research was some of what was being cut! Thanks Dr. Chu! Way to stick up for us! Also nuclear power research was cut. Windmills and bio's are well funded though! Oh yeah, defense programs were cut, but that's not a surprise!

Good job Fitz! Keep it up! When my truck wears out I'll be looking for the NG powered truck. Probably won't be a Chevy again, as it looks like they'll either be gone or run by Obamma+UAW. That ought to be a jewel of a truck with those folks in charge! Hopefully Hyundai will make a truck here in the US, preferrably at a non-union plant. I'm not a big fan of the Toyota truck just yet!

On a lighter note, Artful Dodger, are you an english professor by any chance?

Is There Enough Natural Gas?

Dang it. just paste the following after entering the "www." info in your browser bar:

.examiner.com/x-1586-B...


On May 01 09:52 AM Mmarrkk wrote:

> One of the links above got busted. It should read
>
> "www.examiner.com/x-158...~y2009m1d21-Oceans-are...
>
>
> www.examiner.com/x-158...~y2009m1d21-Oceans-are...