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Everything posted by ian_whitchurch

  1. Foriegnpolicy.com really, really should keep up with the news about Kashagan's production problems and delays. Google 'kashagan delay' if you want an idea of how bad it's been. 38 billion in OOIP - maybe. 38 billion barrels delivered any time this century ... I dont think so.
  2. In reply to: ComUnNoTerms on Friday 26/09/08 11:26pm First, on demand destruction - we are not in uncharted waters on this, we have seen this movie before in the 1970s. We're already seeing a move away from big, stupid, fuel-inefficient cars, and we're seeing people like Walmart put work into whether they should move from shipping by road to shipping by rail. That said, a lot of the 70s demand destruction can't be done again, as the oil-fired power plants were never restarted in the cheap oil 1980s. Regarding prices vs cash balances ... are you asking because you want to buy oilers when they are cheap, or are you looking to buy them when they have established an uptrend (ie are expensive) ? I'm not a trader - I'm a fundamentals guy. I believe that the market gets stuff wrong quite often, and that you need to be prepared to bet against the market ... but only if you have figured out stuff the market hasn't. I also know that if the market doesnt have confidence in you, cash reserves dont help. Dry holes hurt, but management you cant trust means *at best* that it cannot be a long-term investment. The other point to consider is the fact of large and rising cash balances mean oil companies either can't find good projects to invest in, or cant get the equipment to drill them. BTW, these are both indications of why it's going to be rather difficult to drill our way out of Peak Oil. Finally, although the Finance Crisis is having all sorts of weird effects, we've also seen this movie before with many oilers. You'd expect that a company with a a market cap of $100m and $80m cash and a million or so barrels of oil reserves wouldnt be a $100m company, but then it used to be a $40m company with $20m in cash and a million barrels of oil, and then the market decided they do like them and you got the opportunity to lighten up at a buck, and then the market decides they dont like them again. Does finding good, undervalued oil companies give you weekly trading opportunities ? Nope. Do I think it's the way to go ? Yes, but thats me. Your investing style may differ.
  3. In reply to: wolverine on Friday 26/09/08 10:41pm To add a nearly completely innacurate and wrong email off the COE thread here by someone or other. See the price I'm citing for 2005-6 oil. ian_whitchurch Posted Thursday 19/08/04 07:20pm Report Post Quote Post Regular Member 940 posts Joined Jul 04 10 Thanks Theflasherman, As far as the price of oil goes, oil for 2005-6 delivery doesnt go below US$40 at the moment. Arwon is going back along the migration path from Worrior ... it's as close to a sure thing as you get in the oil business. Similarly, I'd be very surprised if Worrior missed - it's a shallow well, and the shallower a well is, the less chance of hitting tight sandstone a la Yarrow-2. Ian Whitchurch
  4. QUOTE (ComUnNoTerms @ Friday 26/09/08 10:07pm) ComUnNoTerms, Call me old fashioned, but I have this thing about annual Net Free Cash and it's relationship to long term stock prices. Oh yes, and we were talking about CERA and the reliability or otherwise of their forecasts ... or are you hoping the topic has been changed ? Ian Whitchurch PS Glad you saw NZO. PPS Chartists hate good stocks when they are cheap, and love them when they are expensive. This is because they cannot be bothered to do research.
  5. QUOTE (ComUnNoTerms @ Friday 26/09/08 09:16pm) ComUnNoTerms, You may or may not have checked back in this thread, but oil is $27 a barrel more than it was at the end of Katrina. If your oil company has production, if it can't make money at these prices then they are doing something wrong. Next, you either accept there is some level of transparency, in which case you can believe what CERA tells you, or you don't, and you can't. ComUnNoTerms, you appear to switch between positions as convenient. Me, I believe that Google Maps and records of rig rentals and records of construction of water handling facilities and associated capex can tell you many things ... but these things are not important if you make up shit as you go. Finally, "You can put lipstick on a Pig, but its still a Pig. (Summary of Oil stocks in this climate)" ... hundred and eight bucks a barrel. Coops may be at thirty eight cents, but I'm sure you could do their net monthly cash flow if you could be bothered. Ian Whitchurch PS Lets not even nod at Westexas and acknowledge the 'peak exports' part of this thread. It is absolutely inconceivable under any circumstances that the Little Father may pay attention to domestic demand.
  6. In reply to: ComUnNoTerms on Friday 26/09/08 05:48am ComUnNoTerms, I'm not sure what is worse - your courage, your logic, your scansion or your rhyme. But be assured Mr Market will, eventually, get to those who are lucky rather than good. I'm still waiting for your reply, but never wrestle in a mudpile with a pig - you'll get bored, and the pig has had more practice. Ian Whitchurch
  7. In reply to: ComUnNoTerms on Wednesday 24/09/08 03:06pm ComUnNoTerms wrote, "Read My Lips "Demand destruction and viable alternatives will cushion the impact of Peak Oil and possibly delay it for another 50 - 500 years ." Not to mention all that gooey stuff bubbling up from the centre of the Earth Ching Ching - How do you like those for facts buddy !!!! One nil http://www.sharescene.com/html/emoticons/lmaosmiley.gif" What demand destruction ? We've had $90-$120 oil for about 12 months. Consumption is still running at circa 85 mmbd. You're quoting some anecdotes, but can you kindly refer me to some actual, like, numbers ? Next, what viable alternatives ? Please name some, capable of adding 10-20 of the 30 mmbls that your 4.5% annual decline rate say we need over the next 15 years. Remember, *over the next 15 years*. Pie in the sky crap like CTL or shale oil ^k^k^k^k^k^k boiling perfectly good source rock by hand doesnt count, unless someone can show me a project that is capable of scaling to 100-200 thousand barrels a day (and remember, coal and gas aint exactly cheap right now either). "all that gooey stuff bubbling up from the centre of the Earth" OK, if you buy the abiotic oil story, can you kindly tell me about an abiotic oilfield. Just one. Anywhere. Please. You know, one of the ones that doesnt have biomarkers that show you the source it comes from. Ian Whitchurch PS In case anyone out there still things CERA's opinions are worth anything more than fish and chip wrapping, here is a nice summary of their comments about oil prices over the last 5 years or so. Note the consistent theme of being completely, totally, utterly, value-destroyingly wrong. http://www.theoildrum.com/node/3487
  8. QUOTE (Ice9 @ Wednesday 24/09/08 10:35am) ComUnNoTerms, OK, lets play. I say CERA are, bluntly, full of sh.t. To be in production in the mmbd range in 2017, the field needs to have been discovered and have the initial wells producing via FPSO now. This is a polite way of me saying 'Tupi at 2 mmbd in 10 years ? Fuggedaboudit'. Unless of course CERA are lying with weasel words and using the term 'production capacity' while silently agreeing that it wont do this each and every day through the year - as we know that while a field might be able to achieve super-production for weeks or months, maintaining that rate will risk permanent damage (cf the Saudi habit of using 'burst' production to stabilise the market, and then taking them offline to preserve reservoir integrity. Also see how Cantarell and Yibal fell off a cliff production-wise). At 4.5% decline over 10 years, thats us losing call it 30 of our current 84 mmbd. Knowing what we know now, wheres that 30 mmbd coming from, ComUnNoTerms. I want it field by field. I want it in a way that acknowledges current shortages of rigs, FPSOs and skilled staff, and in a way that, if you are relying on Iraq going to 5 or 6 mmbd, explicitly states things like 'And Iraq returns to peace and harmony'. So lets play ComUnNoTerms. Give me your facts, and then we will argue about them. Ian Whitchurch PS http://www.theoildrum.com/node/3720#more is useful, if just as putting IEA etc estimates in one place
  9. Go to www.theoildrum.com for updates on Gustav. Briefly, it looks like Port Fourchon/LOOP is going to eat a Cat 3. This the the latest from Chuck Watson " Here's the 23:00 8/31 update: Synthesis of data available at this time: The Loop looks to take a direct hit. Estimating minimum 14 days down time assuming it holds up to specs. Peak waves probably in the 40-45 ft range offshore, so any remaining older stuff built to the older air gaps are probably toast; the newer stuff (55ft gaps) should be OK, but will take a few wave hits. Some potential for undersea slumping and scour - bet we loose some pipelines. GOM overall production will probably take at least a 3-5% permanent hit; pending new wells. The models yield these data for the next 60 days as of right now (longer term under the fold): 14 day: 8.07 MMBBL ( 50.12% normal), gas 59.56 BCF ( 66.06% normal) 30 day: 19.84 MMBBL ( 57.51% normal), gas 140.53 BCF ( 72.74% normal) 60 day: 42.75 MMBBL ( 61.96% normal), gas 298.11 BCF ( 77.15% normal) Bunch of minor damage to "refinery row" (in along the river); most should be back up in a week or so, if product is available. Humanitarian note: this isn't a great track for NOLA, but the weakness we're seeing on the normally stronger side of the storm may save it from worse damage."
  10. In reply to: jimbob on Wednesday 18/06/08 10:50pm Stuff EROEI. Some sorts of energy are easy and useful - for example, I can carry oil around the world in a bucket covered with aluminium foil. Other sorts of energy are not - for example, liquid methane is a real pain, batteries are expensive, and dont even ask about the OH+S issues that antimatter involves. Useful energy gets a premium. Not-useful energy gets a discount. If anyone out there thinks EROEI is a useful concept, I am happy to swap the sorts of energy I like for other sorts of energy, because you believe in EROEI, you must think all sorts of energy are equal, right, because the E in EROEI doesnt define whether it's very useful energy or difficult to deal with energy. I'll start with 6 mcf of natural gas for a barrel of oil, because they have equal energy right, so you must think trading at evens is a good deal. If you arent willing to take this, shut the heck up about EREOI. Ian Whitchurch
  11. In reply to: theadder on Friday 06/06/08 02:40pm "You pick a leggie, you accept they will bowl crap and get hit. You just bet they will take enough wickets for it to be worth it."
  12. In reply to: theadder on Friday 06/06/08 01:10pm TheAdder, You don't get it. For a typical legspinner, and by that I mean every one who was not Bill O'Reilly or Shane Warne, the batsmen going after the pies is *the* essential part of the wicket taking plan. This is because some of those pies will turn the other way, some of them will be mishit after misjudging the spin and some of the pies will leave them stranded halfway down the wicket, because thats how legspinners buy their wickets. You pick a leggie, you accept they will bowl crap and get hit. You just bet they will take enough wickets for it to be worth it. Ian Whitchurch
  13. In reply to: theadder on Friday 06/06/08 10:26am TheAdder, I completely disagree with you about Warne and Macgill. Macgill's lethal balls were just as much hand grenades as Warne's lethal balls. What made Warne the great that he was is that his balls that were not lethal were never the less accurate and difficult to get away. Historically, any given ball from a legspinner was either lethal, whacked or both. Warne's genius was that this did not apply to him - he had the lethality of a legspinner with the accuracy and attention to detail of an offspinner. Ian Whitchurch
  14. In reply to: Avenger on Wednesday 04/06/08 08:53pm Avenger, If you buy a contract for oil for August 08 delivery oil, then in August 08 that oil gets delivered to someone. It might be you. It might be someone you sold the contract to. But *someone* has to take delivery. If persons not intending to take delivery own the contract, then they have to either take physical delivery - or dump it for whatever they can get, or some bastard in Cushing, Oklahoma will ask them where they want their 100 000 barrels of oil (13000 tons) taken to . If the price is over what end consumers are willing to pay, then refineries wont buy it because their tanks are full because consumers dont want to pay todays prices - then Mr Speculator has a problem. This isnt gold you can just store in a bank by the ton - this is sloshy, liquid, flammable crude oil. This hasnt happened. The end consumer is buying, buying, buying. We make 85, maybe 87 million barrels a day, and the customers burn 85, maybe 87 million barrels a day, each and every day. Now, the industry has seen overproduction - it has seen a stockpile of unsold oil. It isnt what we've got now. Punters are buying, regardless of price. As to the latest wobble, dunno and frankly don't care that much. My view is that the important bit isnt what the oil price peaks at - it's what it troughs at. If it falls to $100, thats still $28 more than it was at the end of Katrina. Ian Whitchurch
  15. In reply to: bermuda on Tuesday 03/06/08 09:23pm Avenger, Lets get physical, physical I wanna get physical, Lets get into physical Lend me your body ya, your body yah Lend me your body ya, Lets get physical, physical I wanna get phisicaaaal. Because thats what happens to out-month contracts when they come in month. When they clock over, someone has to take physical delivery. So, either continue your whining, or explain to me what happens to this allegedly speculator driven market when it hits the target month and someone has to deliver, and someone has to accept. Ian Whitchurch PS Dont bother about the heavy low grade sulfer crap that the Iranians produced with their good stuff. Dont even (expletive deleted) bother. Light sweet or nuttin baby. PPS Bermuda, Canada, Mexico and Venezuala supply most of the US. As long as they can pay the bills and keep demand down to a low roar, they should be OK with that.
  16. In reply to: arty on Wednesday 28/05/08 12:11am Arty wrote "Save power for unproductive lighting. Most of the powerstations are either coal or oil-fired. " There are very, very few oil-fired electricity plants left. Basically, oil is for transport fuels and plastics feedstocks - thats where savings have to be concentrated. As always, see www.simmonsco-intl.com for specific suggestions. Ian Whitchurch
  17. In reply to: eliton on Sunday 25/05/08 05:47pm Bad news from the Bakken - http://bakkenshale.blogspot.com "Data from the EOG McAlmond 1-5H well, sec 5, T155, R89, Mountrail Co., indicates that area is east of the area of oil generation, or the Continuous Reservoir as described by the USGS. The company found virtually no oil shows either in the mid-Bakken or in the shales, indicating that the shales are too shallow to have initiated generation of hydrocarbons. Background gas was only around 30 units when it should be in the thousands. The upper shale is found in this area at a subsea depth of about -6600 ft. Some better shows were found near the bottom of the lower shale, which is about 70 ft below the top of the upper shale. What makes this somewhat surprising is that this area is only about a half dozen miles northeast of active development in the Austin area of Parshall Field" Regarding CNG, a big part of the issue is infrastructure. Yes, we could do viable CNG cars in Australia, with a bunch of old Holdens and Fords with big boots now full of CNG tanks, which are popped out and replaced at various servos, in the same way BBQ propane tanks are ... but it's a chicken-and-egg issue. Phil and similar *are* inefficient, but they dont need the rest of the infrastructure there, just you realising you only go to work and back on your CNG vehicle. Finally, the thing that struck me about CNG in India was the emphasis on the tax advantages - it isnt remarkably cheaper because of anything inherent, but because it's taxed less than petrol ie the same thing that gives LPG the price advantage in Australia. Ian Whitchurch
  18. In reply to: Avenger on Saturday 24/05/08 10:21am Long term ? I'm talking about the current situation. Cantarell is stuffed, Burgan is stuffed, the North Sea was stuffed a while ago, Kashagan is late and Mauritania has underachieved expectations. See www.fpso.net - *five* FPSOs available for rent. That means if you want to do a Baska-Manta, there isnt a boat that can do it. The Bakken ? Wells on the fat side of four million that might make 1000 bopd for a few months then tail off to fifty - good to own, but it takes a lot of them to make up for decline in a single mmbd field (oh yeah, and there is serious capacity constraint on the pipelines out of the area). I'm the one bringing facts into this. You're the one looking for someone to blame for why you cant get your supply for what you got it for last year.
  19. In reply to: Commander C on Sunday 18/05/08 07:27pm Commander C wrote "c) other Last ("Oils aint Oils"): ??? Is this a famous jackaroo quote? Can you explain to those non-native Australian English speakers what do you mean by it in this context?http://www.sharescene.com/html/emoticons/smile.gif Thanks again Commander " Basically, there's a bunch of different crude oils out there. You've got stuff that you can almost pour into your petrol tank, and you've got stuff thats like road tar. You've got stuff that's sweet and clean, and you've got stuff thats sour and polluted by sulfer dioxide. Now, the problem is your refinery has to be set up for a particular kind of crude coming in. Heavy is fine, and sour is fine - if you're set up for it. But if your refinery is only set up for light, sweet crude, then you arent willing to pay a buck for a container load of heavy, sour, sulfer-dioxide tasting crud ... no matter how much your customers are paying for distillate, because if you try and use that crud it will trash your expensive machinery. Setting up a new refinery isnt simple or cheap - and remember, it's almost always cheaper to expand the facility your throughput is going through than keep two plants running in different places.
  20. It's interesting going back to 04/05 in this thread and reviewing it. The idea of USD40 oil being amazingly high for example. And a 70 cent AUD.
  21. In reply to: Avenger on Thursday 13/03/08 07:38pm Avenger said "And I repeat the Arabs have consistantly stated in the last few years that they are not responsible for the price of oil. They have no wish to see the world into depression if oil stays at current levels" And I repeat, they have shown no ability to do what they did throughout the 1980s and 1990s, which is whenever 'external factors' bumped the price of oil above the OPEC trading range, Saudi Arabia dropped a couple of mmbl a day on the market until it was back in the band. This was attempted with bringing Haradh III on line. It didnt work. I say that again - it didnt work. Thats what happened to the fundamentals - we're tapped out of substantial quantities of oil that can be brought on the market at the same time that China and India are relentlessly industrialising, releentlessly building highways and relentlessly buying more fuel. Ian Whitchurch
  22. In reply to: Avenger on Monday 10/03/08 09:28am Avenger, Production is not meeting demand - theres a lot more demand for $50 oil than there is production of $50 oil. The new projects that are expected to deliver mmbos per day - Canadian Tar Sands, the Bakken, deep offshore Brazil - just arent viable at $50. If you reckon oil is too pricey, stop buying it and invest the savings in companies that are raising money to drill. Until then, quit whining and pay what the market asks.
  23. ian_whitchurch


    In reply to: albion on Saturday 08/03/08 12:49pm Albion, Whats your evidence that we get that much ?
  24. In reply to: Avenger on Sunday 09/03/08 11:03am Avenger, Because the North Sea is now definitely stuffed. Because Kasahgan is over budget, late and below expectations. Because China and India use about 1.5 mmbd a day more than they used to - last year. Because Bush (the Governor. You know, the smart one) wont less us drill off Florida. Because despite Shabiyah and Haradh III, the Saudis are still doing about what they did last year. Because wells in the Bakken are on the fat side of USD$4m, and they havent started the new pipeline through the Dakotas for that oil and the tar sands from Canada. For the record, EOG's Barnett Shale oil wells should cost about the same. Because the tar sands from Canada have run out of welders prepared to live in the middle of nowhere. Because Chad, Mauritania and Jack all werent as good as they looked. Because Iraq is still a mess. Because Canterell and Burgan are still on the wrong side of 5% decline, and Daqing as well. Probably. Because a 30% price increase in US gasoline led to 3% decline in usage. I can give more reasons. But they are the main ones. Ian Whitchurch
  25. ACD, No, thats not how it works in Australia. In Australia, we pick the best batsman as captain. Full stop, end of story. And up to last week, he'd won 17 straight, so I wouldnt lynch Punter just yet.
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