insider trader-stock pick of the week - 06feb, page-21

Can you provide a reference of why you think the het lime is deeper on the flanks of the field at Boling Dome?

Time is not a rate, production is a rate. Proved reserves life is a standard industry metric and a great leading indicator for reserves revisions. Very high proved reserves lives are likely to have negative revisions, very low proved reserves lived are likely to have positive revisions. I am not aware of another producing company with a reserve life in 3 figures let alone over 500 years. Just accept you got it wrong rather than dismissing the concept. As reserves is nothing more than the integration of production in the future it makes sense to link reserves with time through production, at least as a benchmark.

I will not comment on what management believe.

Yes there have been developments in drilling technology but as regards these "proved reserves" the target depths have been drilled since the 1940s so there is no reservoirs that are now in scope that were previously not. Wells can be drilled in 5000m of water, snaked and 12km laterals - but that is all irrelevant too. The request was to provide specific technologies that will increase production and reserves in these fields.

Skin fracs - the type used here - as you have said been around since the 1950s in a big way so that's out as a new technology. Drilling fluids have advanced reducing potential damage meaning you could get slightly higher flow rates from productive wells (not working out so far) but these wells are pumped which is the rate constraint as bottom hole pressure is effectively 0 in a pumped well. Will not help get around the totally unproductive well issues they are having.

Reserves were defined before the 3D seismic was shot or analysed (look at the company's releases) therefore how can the reserves hang off the seismic results?? Modern seismic will image underneath the salt overhang better but wells have been drilled right into the salt stock. You will get better definition of individual reservoir intervals but the wells spacing is a few tens of acres at most so seismic is not necessary for extrapolation between wells. The main application of the seismic is - rightly - in defining the "high profile" targets.

Any more straws to clutch at??

Short