Spicer

Natural Gas Extraction May Be More Expensive Than It Seems

Not familiar with meaning of the term reserve? If it ain't economically viable with today's commodity market prices it ain't a reserve just a resource.


On Nov 03 10:07 AM Ravi Nagarajan wrote:

> Interesting op-ed in the WSJ this morning on the shale topic:
>
> online.wsj.com/article...
>
>
> I don't doubt that shale provides real reserves. The question is
> at what cost natural gas must trade at to make extraction economically
> viable.

Natural Gas from Shale: Emerging Plays

On Oct 16 08:57 AM UK Gas Guru wrote:

> I've been trying to cover shale from a UK and European perspective
> for over a year at nohotair.co.uk, and your last sentence
> about ridiculous and improbably romantic resonates with what I've
> been seeing here. The entire UK and EU energy policy is built on
> the assumption of gas as a finite resource.
> We're now moving from the disbelief to denial stage where we'll tarry
> a while longer while some players quietly buy up acreage ready for
> the acceptance stage. What we now see is an identity of views between
> green carbon purists, and groups seeking similarly vast levels of
> public investment in Clean Coal and nuclear tech, that is now being
> re-badged as no carbon generation.
> Let's remind ourselves that all the various government strategies
> are for a low -carbon economy, not no-carbon. No carbon can still
> be the ultimate destination, but we can start the low carbon journey
> now using gas as a bridge fuel. Bridge to where? Hydrogen or fusion
> or both, along with wind and solar are my bets. But could we afford
> a no carbon world by investing in CCS or nuclear today?
> CCS and nuclear are dead ends in a gas abundant world.
> Excellent article, a kind of Gas Grand Tour, learnt a lot about
> China for example.
> A company that bears looking at is Toreador Resources, simply by
> how uncoventional they are acting. They started out in the Barnett
> and Haynesville but earlier this year moved the HQ from Dallas to
> Paris. How many other companies move from the heart of the energy
> world to land of the cheese eaters? They recently divested Polish
> and Turkish operations to concentrate on their French acreage. Either
> they are mad as loons, or some crazy coyotes. Worth keeping an eye
> on.

Toreador sold their assets in Turkey and Hungary, they've never held any acreage in Poland, Haynesville or Barnett.

O Canada! (Part III): Black Gold, Natural Gas and Growing Dividends Too

"At its current rate of production and consumption IMO has 140 years worth of proven oil and gas reserves, without ever drilling another new well, so they have the luxury of focusing on oil sands and natural gas right now."

2008 year-end proved reserves were 2.3 billion boe. The combined oil, NGL and natural gas production during the second quarter of this year was 236 000 boepd. By my calculations IMO's current proved reserve life index 26.7 years, which is little less than 140 years.

Hercules Offshore: Follow the Cash Flows

On May 21 01:33 AM Freya wrote:

> Hammer: Its all relative. How much of HERO's earnings come from servicing
> RDC and its like?

Delta Towing's share of HERO's last years revenues was 5.2%. I'd say not much. Am I wrong?

> JU's may be important to you but everyone has a problem in this area.

HERO's rigs have the lowest rated water depth and HERO has the oldest fleet in the market. I think they have the lowest (rig)fleet utilization rate currently.

> Meanwhile what Rigs are operational or become operational will use
> the Logistic services that HERO provides.

I think they're more likely to use Tidewater's or Trico Marine's services.

Political Incompetence Could Drive Up the Price of Oil

Political competetence is keeping the price of O down or is at least slowing its rise. The Obama gang is doing their darnest not to stir up trouble with the Russians, Iranians and Chavez, thus the geo-political premium in the oil price is at its lowest in years.

And the Kurd's actually have an export permission from Baghdad:
online.wsj.com/article...

Positioning for Major Reversal in Natural Gas Prices

Sunoco is an oil refiner, it doesn't produce crude oil or natural gas.

Diamond Offshore Drilling Is a Good Oil Play

"It's all the same."

No it isn't. Deepwater drilling is an entirely different ball game within the oil service sector. With the exception of Middle East and Brazil there hasn't been any major onshore or shallow water oil discoveries in the recent years( though plenty of natural gas discoveries), deepwater however has provided number of significant oil discoveries in the GOM, West Africa and Brazil.

Thanks to the credit crunch "the economic moat"( a new deepwater semi-submersible costs at least $500 million) that surrounds the deepwater drilling sector, has become much deeper and wider and should ensure high margins for the drillers in the near and midterm.

StatoilHydro: Bullish on Exploration

"It has proven reserves of more than six billion barrels of oil."

Less than half of it's proven reserves(6 billion BOE) are oil(60% gas/40% oil +NGL). Last years reserve replacement ration was 86%. Not exactly a strong buy signal. STOs future projects include arctic subsea gas and Canadian oil sands, which are going to triple it's production cost per BOE.

Many Forces Converge to Lift Oil Prices

A quality article from JK once again!

These two are from yesterday:
Bloomberg: "Crude oil production fell 13 percent to 2.767 million barrels a day in April, Mexico City-based Pemex, as the company is known, said today on its Web site. Output a year earlier was 3.182 million barrels a day".
www.bloomberg.com/apps...

OGJ: "Pemex said average daily oil production decreased by 9% to 2.875 million b/d over the 3.164 million b/d produced in 2007, while exports fell 13% to 1.484 million b/d and imports of gasoline rose by 18% to 317,000 b/d."
www.ogj.com/display_ar.../

I don't know which article is correct, but the drop is definitely significant.

@ship shape and bristol fashion
Part of Nigeria's production was temporarily disrupted in Q1 due to rebel attacks.

Assuaging Oil Supply Doubts

"Certainly this discovery will go a long way toward solving those long term concerns on supply."

A fascinating discovery indeed. From 115 billion bbls to 350 billion bbls just like that.
Does that 350 billion refer to OOIP?

Petrobras is Hoarding the World's Deep Sea Drillers

This article is contains a few errors, inspite off the fact that it's mostly a copy-past from a Bloomberg article.

Noble Corp(NE) is a driller, Noble Energy (NBL) is an E&P company and a spinoff of Noble Corp.

Atwood doesn't own a single rig that capable of operating at depths above 5000 feet, so what does it have to with Tupi, Petrobras or ultra dep water drilling. Ensco(ESV) has a much greater exposure than Atwood to the (ultra) deep water market.

"Much of Petrobras' discovery is in oceans at depths of 4-5 miles. Very few rigs on the globe will have capability to drill there. "

[url=www.bloomberg.com/apps...]From Bloomberg:[/url]
"The Tupi field is in a region that lies about 250 kilometers (402 kilometers) off the coast of Rio de Janeiro in water as much as 3 kilometers deep. The oil rests a further 5 to 7 kilometers below the ocean floor."
Thats about 2 miles of water and 3 to 4 miles of rock, sand and salt. So water depth 2 miles, total depth 5-6 miles. As the Bloomberg article you quoted (without quotation marks) states there are current 21 vessels capable of operating in those depths. Plus there are about as many under construction at various shipyards.

Exxon has a 40% interest in block BM-S-22 in the Santos Basin and is the operator on the block. Try googling BM-S-22. You might find the seismic data on that block interesting.

[url=www.bloomberg.com/apps...]The original Bloomberg article[/url]

25 Top Global Stocks of 2007

"Useless...useless...a... more useless...."

Exactly.

Petrobras' Tupi Discovery Will Likely Be Profitable

"the Tupi oil discovery is 4 to 5 miles below the ocean floor"

That would kilometers, not miles, as the picture clearly indicates.

"Further, there is a need for more Floating, Offloading and Storage Facilities [FOPF] -- which are offshore rigs but based on floating tankers instead of attached to the ground in order to produce the Tupi discovery."

FSO=Floating storage, offloading FPSO=floating production, storage, offloading

Petroleo Brasileiro: Don't Believe The Hype

Not 8 billion BBLS, but 5-8 billion BOE. The Tupi field will reach peak production(>200K BOE) in 10-15 years.

7 Companies Searching to Treat or Cure Parkinson's

The developer of Comtan is Orion Pharma of Finland, Novartis merely owns some the distribution rights.