As you say, oil and gas prices are holding up and,in my humble opinion, are more likely to rise than fall. I have been amazed and confused at how poorly the oil shares have responded, or in fact failed to respond, to the increase in oil prices from a low of $12 pbl to $ 28 pbl.
Had the price of gold doubled we would be in the middle of a gold boom.
But analysts have taken the view that the rise in the oil price was temporary. More support will come when the market realises that these prices are a base and we will never again see cheap oil.
But more than anything, the junior oilers need drilling success.
Even with 3d surveys, the results have been abysmal. Many prospects have been virtually dry holes, many have had poor non commercial shows and many have been water wet. All were vastly over rated before drilling and the subsequent loss of confidence has damaged the industry.
The seismic industry and the subsequent geological interpretation is to say the least, dissapointing, badly letting down the oil drillers.
But, having said that, I'm confident that the bottom has been reached for most of the junior oilers and it's all up from here.
