astounding opportunity for drillers

Mammoth Resources address KY Oil & Gas PDF Print E-mail
Written by Mammoth press release
Saturday, 17 December 2005
Mammoth Resource Partners, Inc. President Dr. Roger L. Cory gave a dynamic powerpoint presentation on ‘Peak Oil’ at the quarterly meeting of the Kentucky Oil & Gas Association.

The term ‘peak oil’ was first coined by Dr. M. King Hubbert, whose prediction in 1956 that the U. S. oil production would peak in the early 1970s branded him a heretic. Instead he was proven a seer when his prediction came true in 1971 the year that this country reached its highest production of 11.3 million barrels per day. By 2003 U.S. production had declined to 7.8 million barrels per day.

The decline is not limited to the U.S., however. A 2004 British Petroleum graph depicting world oil production clearly indicates that every oil producing country other than OPEC and the former Soviet Union has already passed its peak. “There are five major countries left in the world that are net oil exporters,� Dr. Cory stated. “Every other country has to import oil.�

National Geographic brought the issue square to the forefront with a frontpage headline: The End of Cheap Oil. The article explained that we’re not running out of oil. “What we’re running out of is easily accessible oil, the ‘low hanging fruit’. The higher crude prices are necessary, Dr. Cory believes, to fund the increased cost of extraction.

“The government has been giving us depletion allowances in oil and gas for a long time,� he continued. “What do you think a depletion allowance is? It’s an understanding that what you’re investing in is declining.�

Dr. Cory still sees great promise for oil and gas production in the Appalachian Basin. “The Appalachian Basin is prime territory for the smaller companies represented by KOGA because it is broken down into thousands of individual landowners. Major oil players are not going to go knocking door to door trying to lease mineral rights on just a few acres.�

While the Basin has been in production since the early 1800s, much of it lies unexplored. According to a recent report by the Interstate Oil & Gas Compact Commission, the basin still contains as much oil and gas reserves as has already been extracted.

In addition, Dr. Cory believes that an astounding opportunity for drillers in the Basin is the reopening of abandoned wells. In many instances these wells were capped only because of the low profit potential of years past. With crude hovering around sixty dollars a barrel, “a well doing just one barrel a day is now worth twenty thousand dollars a year!�