redbaron

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  • Whither Oil Prices?
    If I were a major oil executive, my thinking would be more inclined to increase my reserves by buying independent producers, rather than spending $100 a barrel exploring and drilling in deep water Gulf of Mexico, or other expensive locations. Energy analyst Kurt Wulff values Anadarkos reserves, given it's recent stock price at $25.32 boe (on 8/5/08), and the stock price has since decreased further. Other independents are valued similarly. A major can pay a signicant premium, and still buy the reserves much cheaper than they can Drill, Drill, Drill.

    With that given, why not be buying APC, or other independents like OXY, DVN, XTO, instead of CVX? I don't have a clue when some of these independents might be bought up by the majors, but it looks to me like it is just a matter of time, if the valuations remain close to where they are.
    Sep 07 22:49 pm |Rating: 0 0 |Link to Comment |View article
  • Whither Oil Prices?
    Given the facts presented by the author here, it is quite apparent that those that advocate for 'Drill, Drill, Drill', and 'Drill on the US Continental Shelf', i.e., deep water, etc, will have those companies doing so operating at a loss, if oil does actually go to $70.

    If these numbers are correct, and the cost of finding oil in deep water is growing at about 10% per year, then the current 2008 cost of finding oil is approaching $76-78, give or take a few dollars (2006 cost was $63.71).

    Since looking for oil off the continental US, has not yet been adopted here in the US as an energy policy, and further, given the delay in actual production of perhaps 5-10 years, one can see that for any company to decide to spend billions in off-shore exploration and production now, they must project oil to be at least in the $100 range for the forseeable future.

    One can readily see why there might be some reluctance by the oil majors to spend billions, given the authors data and facts presented here. Oil must stay in the $100 range, or Drill, Drill Drill, will not work out profiitably. And if there is no money to be made in Drill, Drill, Drill, who in the right mind will be doing it?

    The author is absolutely correct on the premise that no one knows where the price of oil is going, but I prefer to think that it has to stay a little higher than what is commonly projected, or there will be no incentive for anyone to actually Drill, Drill Drill.

    Just, IMHO.
    Sep 07 08:36 am |Rating: 0 0 |Link to Comment |View article
  • The Benefits of Shifting to CNG for Fuel
    I agree. CNG is cheaper (now), it is cleaner, and it is more efficient. Why not do it? What are the negatives?
    Jul 27 08:30 am |Rating: 0 0 |Link to Comment |View article
  • Q&A with Marcel Coutu, CEO of Canadian Oil Sands Trust
    Disclosure: I own the trust.

    I found his comments in regards to global oil supply to be of most interest, and further, his thoughts agree with those of T. Boone Pickens, Kurt Wulff, and others who's comments I follow closely. IMHO, these guys have it right, and those that say the world has plenty of oil, are not seeing the 'big global picture'.

    In addition, his comments on total global oil supply, vs. global natural gas supply, I think is important. We here in the US have huge natural gas supplies that we need to develop and use much more effiecently. I see that happening in the coming years, IMHO.

    Canadian oil sands development is going to become critical to the US's oil supply very shortly, IMHO, and it behoves us to listen carefully to people such as this. Mexican supplies are drying up, and without outside help, Mexico will be importing oil within a few years. Canada will soon become our major source of crude oil.

    The stock/trust pays very well, also, and analyst Kurt Wulff projects 70 years of production without decline.


    Again, I own the stock/trust.
    Jun 27 04:34 am |Rating: 0 0 |Link to Comment |View article

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