Oil & Gas 01 (May 08 - Jul 08)

[kennynah]

29 May 2008 12:52 GMT


Lukoil, Gazprom Reveal Big Oil, Gas Discovery In Caspian Sea
MOSCOW -(Dow Jones)- Russia's state gas company OAO Gazprom (GAZP.RS) and OAO Lukoil (LKOH.RS), the country's largest independent oil producer, have discovered a large oil and gas condensate deposit in the Caspian region, the companies said Thursday.

The field is located 150 kilometers from Makhach-Kala on the border between Russia and Kazakhstan. The companies said they currently explore the deposit, but didn't provide any details about volumes.

The deposit was discovered by TsentrKasneftegaz - a Gazprom and Lukoil joint venture created in 2003.

[kennynah]

needless to say...Oil shot north...BIG F*cking time...>133 from 128.5....immediately...

*************

29 May 2008 14:30 GMT
BULLET: ENERGY: US EIA oil and nat gas data for wk May 23:...
ENERGY: US EIA oil and nat gas data for wk May 23: "U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 8.8 million barrels from the previous week.

At 311.6 million barrels, U.S. crude oil inventories are in the lower half of the average range for this time of year. The drop was due to temporary delays in crude oil tanker off-loadings on the Gulf Coast.

Total motor gasoline inventories decreased by 3.2 million barrels last week, and are near the lower limit of the average range.

Finished gasoline inventories remained unchanged last week while gasoline blending components inventories decreased during this same time.

Distillate fuel inventories increased by 1.6 million barrels, and are in the lower half of the average range for this time of year.

Propane/propylene inventories increased by 1.7 million barrels last week

[blid2def]

Actually what's the objective behind the weekly announcement of crude inventories? One of the things that have been discussed before in a commentary I've read, is that it just feeds speculation.

[Musicwhiz]

Think this article is of importance to oil and gas. The link is >> http://www.investors.com/editorial/IBDA ... e=20080528

May 28, 2008
Demand For Deep-Water Drilling Rigs In Faraway Places Stays Hot
By BRAD KELLY

Offshore drilling has become the last frontier in the exploration for new oil and natural gas reserves.

The easy-to-get oil on every continent except Antarctica has been found, and geologists believe that there are few "elephant" oil fields left to be discovered.

One of the hottest markets today is Brazil, which recently discovered two hydrocarbon-rich basins off its shores. The country announced it has leased 80% of the world's deep-sea offshore oil rigs.

Another new market is emerging halfway across the world off the coast of India. The discovery of a promising natural gas block, the Krishna Godvari basin, could make the country more oil self-reliant.

Brazil and India represent the hidden potential that lies beneath the ocean's surface, but no oil company can obtain it without a drilling rig.

While it's not the biggest oil and gas driller in the $38 billion offshore market, Atwood Oceanics (ATW) compensates for its size with quality rigs and a geographic footprint.

Premium Rigs

The Houston, Texas-based drilling contractor owns and operates eight premium offshore rigs.

It has a mixed fleet that includes four semisubmersibles — deep-water rigs that can drill down to 25,000 feet or more. It owns two premium jack-ups, which drill in shallow waters, a submersible and a tender assist unit that provides living and storage space.

Atwood rents out its rigs by contract to the highest bidder. Long-term contracts help shield the firm from volatility in the market. For instance, when a violent storm like Hurricane Katrina shuts down a rig, Atwood still gets paid.

However, all its offshore drilling rigs are working internationally, except for its one submersible unit, which drills in the Gulf of Mexico.

"We're solely in offshore, and we work throughout the world with ultradeep equipment," CFO James Holland said. "All of our units work on a per-day basis for the international oil companies and the national oil companies."

The oil majors and NOCs are paying historically high day rates to drill in some of the top regions in the world. Those include West Africa, the Mediterranean and Southeast Asia.

There were 362 offshore rigs operating in April vs. 337 units from a year ago, according to Baker Hughes, which has counted rigs since 1944. But there is limited availability, says Collin Gerry, an analyst with Raymond James.

Nearly all the units, especially deep-water rigs, are 100% utilized today, he says. That means oil companies are going to pay more.

Oil's surge to record highs around $130 a barrel are enough to justify the costs of exploring under the sea, which many geologists believe to be the only virgin territory left.

"High oil prices are enough to justify costly exploration projects in deep waters," Gerry said. "Oil companies are willing to pay almost any amount in order to get a rig to work for them."

Day rates are fueling business for all drilling contractors these days as contract renewals are bringing in double the rate of prior contracts.

Omar Nokta, a Dahlman Rose analyst, raised his forecast for average drilling rates by $50,000 a day, meaning the most expensive deep-water rigs could fetch an average of $600,000 in the next three years.

Drilling contractors stand to benefit from the higher drilling fees. Transocean (RIG) — the largest driller, with 139 rigs — cited higher average day rates for its fleet as a key factor behind its $1 billion increase in first-quarter revenue.

Atwood also has benefited from higher day rates. It earned $1.30 a share in the second quarter, up 29% from a year earlier.

Revenue rose 20% to $113.5 million. This was its ninth straight quarter of at least double-digit earnings growth, which started with a string of four quarters with triple-digit increases.

In his 31 years in the drilling industry, Holland says he has never seen rates this high before. "They're the highest rates our units have ever had," he said. "And probably the strongest industry market conditions that I've ever seen."

The Atwood Eagle, located off Australia's west coast, will work for about a month and a half for $360,000 a day. But when the new contract kicks in, it will have a two-year commitment at $405,000 a day, Holland says.

With two rigs now under construction, Atwood is having no trouble getting bids to put them to work.

The semisubmersible that it's building for Chevron, (CVX) which will go to work in Australia in 2011, entered a day rate of $450,000 to $470,000, depending upon the length of the contract they ultimately decide on.

Day rates are based on what type of unit you have. For example, a driller will fetch more money for a deep-water unit than for a smaller jack-up, which are seeing rates decline due to a slew of these types of rigs soon to hit the market.

The capital investment for a new build is huge. The jack-up Atwood is building costs $165 million, while the semisubmersible will cost the company almost $700 million.

But Atwood won't build a rig based on speculation, despite the high day rates and its strong cash holdings.

It's a conservative company, Holland says, like most American-based drilling contractors that experienced the downturn in the industry in the 1980s and early 1990s.

Strong Fundamentals

The driller is actively pursuing opportunities and will continue to seek growth only when backed by contracts, Holland says.

While the industry's fundamentals look strong, there still are risks, says Alan Spackman, the vice president of offshore technical and regulatory affairs for the International Association of Drilling Contractors.

"Geopolitics always comes into play when talking about the energy sector," he said. "Drillers are working in regions of the world that can be politically unstable, and any sanctions placed on a nation will obviously disrupt business."

Another major industry challenge is the lack of manpower available to operate the rigs, Holland says. The generational gap from the downturn 20 years ago has left most drillers with the same problem.

"The question is how you man the new equipment coming on line, while at the same time try to train people to replace those who will be retiring," he said. "It's a big challenge, but I'm sure we'll get there."

[kennynah]

i'd be very forward with you guys...and i will dispense with the politeness.... oil is very dirty...and it takes people, like u n me, if tio take it at face vaue, to trade it successfully...

sorry, very crude hor...but if one is to make MONEY.... be realistic... no need to be a gentleman... just whack it, if u think it's falling...face the music...

where oil and gold is concern....people like heng heng...will make it...why? becos got balls...do it...dont talk...if f**k it up...then accept it..else...enjoy the spoil...


this is what huatopedia is all about.... do it...then come here and talk...be a man...
( or actually, can also come here and talk about it...bounce off idea lah)


but i share with you honestly.... no need to talk cock so much about jesse livermore... goerge soros....warren buffet.... lynch....abc...def.... it all boils down to you and me.... do it...and cannot make it...too bad...if can make it...,,i welcome u here at huatopedia...i learn from u...whom i can "talk" to... last time, i tried getting soros at his mobile, it was not turned on...

heng heng..what u say?

((edited - to trim off some "heavy" language ))

[iam802]

where oil and gold is concern....people like heng heng...will make it...why? becos got balls...do it...dont talk...if f**k it up...then accept it..else...enjoy the spoil...

Going a bit off-topic.

'Got balls' reminds me of Glengarry Glen Ross movie.

Embedded videos have been disabled.
Click to view video: http://youtube.com/watch?v=TROhlThs9qY

at 5:23 in the video, Alec Baldwin will take out a set of 'brass balls'

==
You know what it takes to sell real estate?
It takes brass balls to sell real estate
==

A classic movie.

[HengHeng]

Last check .. hmmm balls still intact.. sobs .. why me again? What did i do ? LOL..

Frankly speaking i do not warrant for such attention from anyone. I'm just a nobody ..LOL... trying to squeeze some money from the markets. Whatever i said won't move any markets neither make someone richer by having it. So i think i'm overly rated in this scenario.

Basically oil trading to me no fundamentals , i think i mentioned before echoing geoge soros's view on reflexivity. It is about the human reflex action against pain issue and for people to react only when pain is unbearable. For instance i'm a big organisation how best to squeeze the life out of you when i can squeeze u both ways. Yesterday was a typical scenario of squeezing both sides.. Went up 4 bucks and came down 7 bucks squeezing the life out of many.

For me i'm just trading volatiltiy beh ki jiu loh lor.

[kennynah]

h2 : sorry if i seem to "target" u...hahaha... no lah...

just wan to have your views mah... which u gave...so, thanks... beh ki jiu loh view...

[kennynah]

Actually what's the objective behind the weekly announcement of crude inventories? One of the things that have been discussed before in a commentary I've read, is that it just feeds speculation.

it does make sense... and i always believe that such data is no secret to some people...

[iam802]

Actually what's the objective behind the weekly announcement of crude inventories? One of the things that have been discussed before in a commentary I've read, is that it just feeds speculation.

it does make sense... and i always believe that such data is no secret to some people...

Those data affects traders with physical exposure ; those who literally buy and sell physical oil and ship them from one location to another.

They have a lot more planning to do compare to the 'paper traders'.

Sometimes, they are willing to make a 'loss' on paper trade, but that loss is to reduce their physical asset exposure. So, lose $100k on paper trade, but physical is going to come in at $X million.