Comments on: Economic worries rein in exploration investment http://blogs.epmag.com/judy/2008/10/28/economic-worries-rein-in-exploration-investment/ Judy Maksoud, Editor Fri, 19 Mar 2010 02:14:20 +0000 http://wordpress.org/?v=2.5.1 By: Jim Rockett http://blogs.epmag.com/judy/2008/10/28/economic-worries-rein-in-exploration-investment/#comment-185 Jim Rockett Sat, 01 Nov 2008 04:10:58 +0000 http://blogs.epmag.com/judy/?p=29#comment-185 As yet, we have not had a financial crash but we have had a financial crunch much like tight money situations in the past. There is money, one just has to figure out how to get one's share. No one deserves to buy more than they can afford just because the Federal Government said to loan them money. This why we have subprime mortgages which caused part of the crunch. Lack of business judgment on the part of lenders. Why make a loan to someone who can not pay it back. The hedge funds are the second part of the crunch. Gambling with the rise and fall of the market. There were some big loosers. Most of them hurt only themselves, but one, SEM Group hurt their oil suppliers because they gambled with their money and lost it. OKLA. has a law requiring oil purchsers to keep that money safe. This could be a crime depending on how the law is written. One must operate a business so as to do no harm the way SEM Group did and some of the banks have done. As yet, we have not had a financial crash but we have had a financial crunch much like tight money situations in the past. There is money, one just has to figure out how to get one’s share. No one deserves to buy more than they can afford just because the Federal Government said to loan them money. This why we have subprime mortgages which caused part of the crunch. Lack of business judgment on the part of lenders. Why make a loan to someone who can not pay it back. The hedge funds are the second part of the crunch. Gambling with the rise and fall of the market. There were some big loosers. Most of them hurt only themselves, but one, SEM Group hurt their oil suppliers because they gambled with their money and lost it. OKLA. has a law requiring oil purchsers to keep that money safe. This could be a crime depending on how the law is written. One must operate a business so as to do no harm the way SEM Group did and some of the banks have done.

]]> By: John Alexander http://blogs.epmag.com/judy/2008/10/28/economic-worries-rein-in-exploration-investment/#comment-184 John Alexander Fri, 31 Oct 2008 01:29:48 +0000 http://blogs.epmag.com/judy/?p=29#comment-184 Most of us who have been in the business for a while have seen booms and busts, it's just the nature of the beast. The very troubling aspect of this downturn, at least for me, is the coincidental decrease of oil and gas prices with the financial crash. Prudent operators have invested revenue in new drilling or acquisition and various financial instruments to finance these activities. Even if oil and gas prices went south, sound financial investments softened the impact. I am not a pessimist, but I am an experienced optimist; this is going to be a tough one. Most of us who have been in the business for a while have seen booms and busts, it’s just the nature of the beast. The very troubling aspect of this downturn, at least for me, is the coincidental decrease of oil and gas prices with the financial crash. Prudent operators have invested revenue in new drilling or acquisition and various financial instruments to finance these activities. Even if oil and gas prices went south, sound financial investments softened the impact. I am not a pessimist, but I am an experienced optimist; this is going to be a tough one.

]]> By: Jim Rockett http://blogs.epmag.com/judy/2008/10/28/economic-worries-rein-in-exploration-investment/#comment-183 Jim Rockett Thu, 30 Oct 2008 22:26:27 +0000 http://blogs.epmag.com/judy/?p=29#comment-183 Price downturns are a fact of life in our industry. The storm clouds were building when the price went so high, so fast. We could anticpate a short span of high prices and then a sharp downturn in price that dropped faster as then they went up. No supplier should have increased prices to operators and no operator should have made any business plans more than their normal oprations until the prices had leveled off for a period of months. This is what I did as an outsouce for operators. I held my prices steady and even cut some. Good business judgement always beats the odds everytime. Most of the companies above are going ahead with business as usual, doing what they did last year. Price downturns are a fact of life in our industry. The storm clouds were building when the price went so high, so fast. We could anticpate a short span of high prices and then a sharp downturn in price that dropped faster as then they went up. No supplier should have increased prices to operators and no operator should have made any business plans more than their normal oprations until the prices had leveled off for a period of months. This is what I did as an outsouce for operators. I held my prices steady and even cut some. Good business judgement always beats the odds everytime. Most of the companies above are going ahead with business as usual, doing what they did last year.

]]> By: John W. Mason http://blogs.epmag.com/judy/2008/10/28/economic-worries-rein-in-exploration-investment/#comment-182 John W. Mason Thu, 30 Oct 2008 17:33:01 +0000 http://blogs.epmag.com/judy/?p=29#comment-182 Even with interest rates at the historically low levels we've recently experienced, drilling up one's cash flow has always been the prudent way to operate. Reserve borrowing for aquisitions. What companies are now doing is simply reverting to normal operations. I'll never complain about $60 oil and $7 gas. Even with interest rates at the historically low levels we’ve recently experienced, drilling up one’s cash flow has always been the prudent way to operate. Reserve borrowing for aquisitions. What companies are now doing is simply reverting to normal operations. I’ll never complain about $60 oil and $7 gas.

]]> By: Dale Larsen http://blogs.epmag.com/judy/2008/10/28/economic-worries-rein-in-exploration-investment/#comment-181 Dale Larsen Thu, 30 Oct 2008 15:06:39 +0000 http://blogs.epmag.com/judy/?p=29#comment-181 I agree that there will be some slowing in our industry. But I also believe that "the sky is falling" mentality does our industry no good. How about discussing the positive things still going on in our industry like natural gas drilling in the Rockies continues to stress services to the maximum and the Bakken play is the brightest spot on the horizon in our industry in about 15 years. Thanks for otherwise useful commentary in your publications. Dale I agree that there will be some slowing in our industry. But I also believe that “the sky is falling” mentality does our industry no good. How about discussing the positive things still going on in our industry like natural gas drilling in the Rockies continues to stress services to the maximum and the Bakken play is the brightest spot on the horizon in our industry in about 15 years.

Thanks for otherwise useful commentary in your publications.

Dale

]]> By: M.V.Ramana http://blogs.epmag.com/judy/2008/10/28/economic-worries-rein-in-exploration-investment/#comment-180 M.V.Ramana Thu, 30 Oct 2008 11:35:42 +0000 http://blogs.epmag.com/judy/?p=29#comment-180 It is likely that there can be job losses in oil industry from 2009 -Q2 It is likely that there can be job losses in oil industry from 2009 -Q2

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