Re: Dynamics of Fossil Fuel Movement
Posted: Fri 07 Jul 2017, 18:25:40
As good a spot for this update as any. Obviously not directly related to PO. But certainly just one more element of the bigger picture of the POD:
The govt announced a lower royalty for new GOM leases. For !eases in 200 m water depth and less: was 18.75% reducing to 12.5%. Certainly in part due to lower oil prices. But the GOM above 600' (which pushes out to the edge of the shelf north of where the Deep Water plays begin) is a very mature trend. Completely shot with 3d seismic multiple times.
But some companies have been trying to develop a very deep play below 28,000' in shallow water close to the shoreline. Some huge IN PLACE reserves have been reported. But much of them may remain in place: the pressures and, in particular, the temperatures are so high the completion technology is right at the limit. A company spent over $220 million on its first well in the trend and eventually plugged it as unproducible. Not sure if the lower royalty combined with relatively low NG prince's is going to build enough enthusiasm.
The govt announced a lower royalty for new GOM leases. For !eases in 200 m water depth and less: was 18.75% reducing to 12.5%. Certainly in part due to lower oil prices. But the GOM above 600' (which pushes out to the edge of the shelf north of where the Deep Water plays begin) is a very mature trend. Completely shot with 3d seismic multiple times.
But some companies have been trying to develop a very deep play below 28,000' in shallow water close to the shoreline. Some huge IN PLACE reserves have been reported. But much of them may remain in place: the pressures and, in particular, the temperatures are so high the completion technology is right at the limit. A company spent over $220 million on its first well in the trend and eventually plugged it as unproducible. Not sure if the lower royalty combined with relatively low NG prince's is going to build enough enthusiasm.