A von Altendorf

http://www.cwsx.org

23 Comments

    • ON: Wed Jun 11th 20:11 PM
      Commented on:
      Oil Swings Go Beyond Fundamentals
      War risk is $30 or more. Big swings are reaction to news, rumors.
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    • ON: Wed Jun 11th 19:56 PM
      Commented on:
      Outstanding Capital Efficiency at BPZ Resources
      Scott,

      I was pointing out the difference between reality and Monte Carlo reservoir modeling. 133 bcf 'proved' does not mean they can actually produce it. Nor does paying a six-figure fee guarantee objectivity of the consulting shop that 'certified' reserves. Science is not supposed to be a casino. I think it's an excellent idea to ask how much oil and gas BZP is producing. Not well test results. Not computer-estimated reserves. Cash money revenue.
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    • ON: Wed Jun 11th 06:44 AM
      Commented on:
      Outstanding Capital Efficiency at BPZ Resources
      "The flow capacity of offshore Peruvian reservoirs is limited. The most productive well at the Albacora field flowed at an average rate of only 451 b/d oil prior to abandonment." Deckelman et al (2008) PROGRESO BASIN, OFFSHORE ECUADOR AND PERU..., Journal of Petroleum Geology

      Amazing what folks can do with reservoir modeling, ain't it?
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    • ON: Tue Jun 10th 19:32 PM
      Commented on:
      World Oil Reserves: Russia's on the Map
      Estimates of reserves are based on USGS survey ccompleted in 2000, a better graphic and explanatory text available here:
      www.agiweb.org/geotime...

      Russia indeed has the greatest potential, most of it in Western Siberia, followed by Greenland and other Arctic waters. Reservoirs in China have been wrecked, Saudi Arabia and Iran are in decline.

      See also my negative research report last week on Brazil seekingalpha.com/artic...

      I agree that Canada is an extremely important resource, but not oil sands, rather new oil & gas exploration in the far north and near Greenland: Cairn Energy Plc, EnCana, Husky, DONG, Chevron.
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    • ON: Tue Jun 10th 01:45 AM
      Commented on:
      Black Gold or Yellow Gold?
      Back to the market for a minute. I'm neutral on Conoco, but you might want to look at this hot Canadian explorer, partnered with Devon

      MGMCF MGM ENERGY CORP 59318A100
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    • ON: Mon Jun 9th 22:21 PM
      Commented on:
      What's Behind the U-Turn in Oil Prices?
      Jim, I doubt Saudi Aramco has any spare capacity. You're on the right track when you talk about war risk. Ask yourself if Russia would like to be a monopoly exporter? That's what shutting off the ME means. And it would certainly screw the Americans.
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    • ON: Thu Jun 5th 22:40 PM
      Commented on:
      Petrobras: Extremely Overvalued
      Bloomberg update: Petrobras doesn't have the E&P skills to appraise or develop Tupi-Carioca, need $250 billion to attempt it and will have to partner with Exxon to get it done, if it's worth doing, which is still an open question.

      www.bloomberg.com/apps...
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    • ON: Thu Jun 5th 02:27 AM
      Commented on:
      Has Oil Production Reached a 'De Facto' Peak?
      "some countries, like Venezuela, could be feigning incompetence"

      Well, no. Chavez fired Pedevesa's senior scientific/technical staff and replaced them with party functionaries. He nationalized foreign assets and cancelled deals with U.S. e&p consultants. Deliberate brain drain, hatred of expertise as such.

      I enjoy reading your articles.
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    • ON: Wed Jun 4th 02:42 AM
      Commented on:
      Petrobras: Extremely Overvalued
      Abiotic oil is impossible. There are no hydrocarbons in the mantle, bubbling up through basement blocks. Peak oil is a reality.
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    • ON: Wed Jun 4th 01:11 AM
      Commented on:
      Petrobras: Extremely Overvalued
      Ken Heebner got in at $30, doubled his position at $40. PBR is less than 0.2% of his portfolio. I agree, let's see what the stock trades at six months from now.
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    • ON: Tue Jun 3rd 23:59 PM
      Commented on:
      Petrobras: Extremely Overvalued
      Quick follow up on Anaconda's remark that deepwater oil discoveries in the Gulf of Mexico are analagous to deepwater Brazil. Sorry, not true. GOM is a rapidly subsiding megabasin. Oil was found in middle Miocene formation, with a secondary objective in early Tertiary -- very young stuff, regardless of overburden and SSTVD. Petrobras is drilling into a Jurassic pre-rift or Berriasian syn-rift carbonate, about 100 million years older. Burial age matters. Pressure does not "keep oil from cracking."
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    • ON: Tue Jun 3rd 21:53 PM
      Commented on:
      Petrobras: Extremely Overvalued
      I appreciate Anaconda's contribution to this discussion. There are three separate topics concerning Brazil's claim of 50-70 billion boe in new reserves: geology, engineering, and finance. Certainly, the world needs and wants a new giant field. All the others are in fairly steep decline, including Ghawar. The continental margin of Brazil is easier to deal with than the Arctic Ocean.

      The goal of an appraisal program is to learn how big a prospect is and how it might be best developed. At the moment, all we have is a Monte Carlo projection based on a single well test (as far as I know). Use of statistical probability models in the oil industry is an pandemic mental illness. I recently attended a presentation by a statistics expert who said you could throw 21 darts at the continent of Africa and have a 95% chance of finding oil, without looking at geological provinces. That's how Petrobras and ANP came up with their new reserves guesstimates, using a statistical model. Nothing unusual about it, everybody in the industry does it, except geologists, geochemists, and geophysicists. Science is not a dice roll, nor 21 dice rolls based on arbitrary inputs.

      The geological question is highly technical. My skepticism is based on Petrobras' published data. The BM-S-11 Tupi well found pay in "heterogeneous layered carbonates, variable reservoir quality." What they were expecting however was a pre-rift sandstone or trapped accumulation directly under the salt pillow. Like I said, it's a technical question with a lot of tangents and implications. But I take Petrobras at their word, and they reported that Tupi discovery is mostly gas (double the GOR of Ghawar).

      This is okay for PBR. They need gas and are planning to build a 300km pipeline for domestic supply. It doesn't have to make financial sense.
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    • ON: Tue Jun 3rd 08:52 AM
      Commented on:
      Petrobras: Extremely Overvalued
      Yep, that wily Accumulator certainly knows his stuff, quoting Christopher Palmeri who covers Los Angeles for Business Week, apparently an investigative reporter on petrochemicals, too:

      "Although the Bratz are breathing down her neck, Barbie still has plenty of life in her, with overall sales expected to increase this year. In November, Mattel launched My Scene, an extension of the Barbie line whose characters are dressed suspiciously like those street-savvy Bratz."

      First it's a puff piece on Mattel, then a smiley face for PBR. All knuckles and know-how, when you're *an american published (very well known unbiased) investigative reporter at BWEEK*

      A colleague advised me not to engage the trolls, just ignore them, which is always good advice. However, I'm here in case anyone wants to talk more about the geology of the Santos basin.
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    • ON: Tue Jun 3rd 01:43 AM
      Commented on:
      Petrobras: Extremely Overvalued
      So we understand each other correctly, the Tupi-Carioca gas plays are subsalt, roughly 20 million years older than Campos turbidite sands. You recognized the issue of maturation. Are PBR engineers fibbing? In some respects, yes. Cartoon subsalt strata and faults drawn on a 2D line. "Variable reservoir quality" as a euphemism for low permeability and dolomite. Shell bowed out. If Exxon is in, let's wait and see what they report next year, if anything.

      Petrobras has to find new reserves. I estimate they have 6-7 years recoverable (at 2 million boe per day) in Campos, no meaningful opportunities onshore. That's why PBR went on a shopping spree for deepwater rigs, and I think they plan on funding exploration with a bond issue, since they have a slightly negative cash flow. Most brokers and bankers call PBR a safe bet. I'm sure they'll get whatever cash they need.

      BTW, mag and grav tell us basically nothing.
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    • ON: Mon Jun 2nd 19:56 PM
      Commented on:
      Petrobras: Extremely Overvalued
      Please, get the facts straight. Our chief scientist did a project for Marathon, not "Venezuela" and it was 12 years ago. No one paid me to release this article about Petrobras. Yes, it affects the reputation of our firm, hopefully for the better, but that seems doubtful at present. In a couple years we'll see.
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