Gold/Mining/EnergyBig Dog's Boom Boom Room

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From: riskyinvesting3/28/2012 8:50:29 AM
2 Recommendations   of 198409
Jim Bob's presentation at HW was typical Jim Bob. For the faithful, he proved the same song and dance about the potential of the Ultra Deep.

The market continues to punish MMR for the lack of data on DJ1. The market knew about the failure of the F perf gun. The fact that the C gun didn't fire was new. Fortunately, it is easy to fix. The big question is the flow rate. I believe pipe capacity is 75. I would like to see 50, even if it has to ramp to that over time. The issue of debris and cooked drill fluid is worrisome. The good news is that after 2+ years we should have the first real flow data from the ultra deep in a week or so, maybe less.

I have been told that the folks at MMR and EXXI believe the the various zones at DJ1 are connected. If so, the fact that the F sands weren't perforated may not matter that much.

The completion problems show that the Ultra Deep is still a science project, and an expensive one at that. 30k PSI and 450 degrees is a tough operating environment. I think all the issues are surmountable with time and money.

The $2 gas environment is tough for all producers. The market structure for gas has changed. Shale plays are the new storage. Once mid-stream infrastructure gets built out, new production can be brought on quickly. We don't have to look for new places to drill to increase supply, all we have to do is drill identified locations and let the flush production flow into the system. The days of $13 gas are over in NA for the near to intermediate term. Once the future strip trades much above $5, producers will lay on hedges and produce into those forward prices. The US now has the ability to quickly ramp gas production in response to higher prices.

In a low price environment, the low cost producer wins. If the Ultra Deep play works, MMR is the low cost producer.

I think the Ultra Deep gas, if it gets produced, ends up on LNG tankers headed to the highest bidder.

It seems like we have been waiting forever. I sold a few April 10 puts for .70
so I guess I am still a believer. I own EXXI in a bigger way. I also like PXP here as well. Lots of to play the Ultra Deep.


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To: Dennis Roth who wrote (166421)3/28/2012 9:02:44 AM
From: Dennis Roth
1 Recommendation   of 198409
Fitch: Total Gas Leak 'Not Another Deepwater Horizon'

Wednesday, March 28, 2012 - Ratings agency Fitch said that it believes Total is likely to retain 'AA' credit rating, but warns that Elgin incident could cost the French company as much as $7.6 billion.

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To: sammie44 who wrote (165470)3/28/2012 9:08:21 AM
From: Dennis Roth
1 Recommendation   of 198409
BP Becomes Latest Oil Major to Enter Ohio's Utica Shale

Tuesday, March 27, 2012 - BP has signed an agreement to lease 84,000 access in Utica/Point Pleasant Shale in northeast Ohio for future oil-and-gas production.

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From: Dennis Roth3/28/2012 9:21:35 AM
2 Recommendations   of 198409
US oil output can climb 1.5 million b/d by 2015 on shale plays: EOG CEO
New Orleans (Platts)--27Mar2012/100 pm EDT/1700 GMT

US operators should add another 1.5 million b/d of oil and liquids production by 2015 due to the continued growth of shale plays, EOG Resources CEO Mark Papa predicted Tuesday.

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From: Dennis Roth3/28/2012 9:36:21 AM
1 Recommendation   of 198409
LNG-Soaked Japan Burns Oil as Nuclear Reactors Sit Idle
By Jacob Adelman and Yuji Okada - Mar 28, 2012 3:05 AM ET

Japan is consuming the most oil in four years as it runs out of capacity to use liquefied natural gas as a stopgap for idled nuclear-power plants.

Utilities are burning about 400,000 barrels a day, more than at any time since 2008, after more than doubling use of crude last year, according to Deutsche Bank AG. (DBK) LNG can meet about two-thirds of Japan’s electricity needs when all its nuclear reactors are offline, government data and forecasts from the Institute for Energy Economics show.

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From: CommanderCricket3/28/2012 10:16:37 AM
   of 198409
Boy does this feel like last spring....

Wonder if we've got 6 months of a low drip lower to look forward to? Good thing the coal trade went to sit fast as it let me keep the losses to a minimum. Someday....waiting for another set up for BTU, WLT and CLF.

At least UAL is coming into play again! As I'm usually early with UAL, I'm giving it a couple of days.


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From: CommanderCricket3/28/2012 10:24:53 AM
   of 198409
Brazil throws kitchen sink at Chevron, then picks up microwave and throws it too
RIO DE JANEIRO (Dow Jones)--The union representing oil workers in Brazil has
filed a civil lawsuit against U.S. oil major Chevron Corp. (CVX) and rig
operator Transocean Ltd. (RIG) for the companies' roles in a November oil
spill, asking the government to revoke Chevron's offshore concession contract.

"[Chevron] has demonstrated that it is not technically prepared to produce
oil in deep waters, especially in an environmentally sensitive area," Joao
Antonio de Moraes, coordinator of the Federacao Unica dos Petroleiros union,
told Dow Jones Newswires in a telephone interview Wednesday. FUP is an umbrella
union comprised of 13 separate oil-industry unions across Brazil.
Fair Use Quote.

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To: Dennis Roth who wrote (165572)3/28/2012 10:25:03 AM
From: Dennis Roth
1 Recommendation   of 198409
France discussing strategic oil release with UK, U.S

(Reuters) - France is in talks with the United States and Britain on a possible release of strategic oil stocks to push fuel prices lower, French ministers said on Wednesday, four weeks before the country's presidential election...

...Fuel prices in France have hit record levels, prompting an intense debate between presidential candidates ahead of the national election.

In neighboring Germany, the government in Berlin said on Wednesday it was unaware of any official request from the United States to release emergency oil stockpiles and did not believe the current situation justified such action under German law.

The German law on oil provisions says emergency reserves can only be released in the case of "physical disruption to supplies. In our view there is no physical shortage at the moment," a government spokeswoman told reporters.

Oil reserve releases are normally coordinated by the IEA, representing 28 industrialized countries on energy policy.

But the head of the IEA Maria van der Hoeven has said on several occasions that a coordinated IEA release is not warranted because there is no significant supply disruption on world oil markets. Germany and Italy say they are opposed...

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To: Bearcatbob who wrote (166425)3/28/2012 10:26:42 AM
From: sammie44
3 Recommendations   of 198409
>> Dennis, They screwed up perfing the C zone as well. That was announced yesterday afternoon. EXXI recovered very nicely yesterday - a trade I missed.>>

When you say 'they', do you mean MMR or the service provider? It was likely SLB who screwed up the perf gun attempts.

Long and disappointed here. Been watching this UD play attempt since long before MMR got involved. That being said, I for one never really expected DJ1 to fully recover its costs. No dry gas plays work at $2 and I've been bearish gas for years with the expectation that we go even lower from here so being long wasn't a call on near-term gas, nor the ability to make the first well commercial. If the resource is there and they can figure out completion technologies at these depths/temps/pressures, someone will pay for it. Opportunity cost of money hurts the most as I wait, but you'll drive yourself crazy investing if you start down the 'what if' path.

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To: sammie44 who wrote (166435)3/28/2012 10:50:34 AM
From: CommanderCricket
1 Recommendation   of 198409
Opportunity cost of money hurts the most as I wait, but you'll drive yourself crazy investing if you start down the 'what if' path.

Slap this comment on the peg board!

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