Oil – Nov 5

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Big oil’s expensive black gold quest
Steve Hargreaves, CNNMoney.com
One study says oil company spending is having little impact on boosting supplies, but firms continue to hunt.
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Soaring crude prices may have prompted oil companies to venture into ever hostile terrain to bring supplies to market, yet by one account all the spending may merely serve to hold production levels constant.

According to a recent report from oil and gas consultancies John. S. Herold and Harrison Lovergrove & Co., investment in “upsteam” activities, which incude exploration and production, jumped 31 percent from 2004 to 2005.

Yet the study, based on data provided by publicly traded oil and gas companies worldwide, said production volumes grew just 1 percent, and proven reserves in the ground remained essentially unchanged.

“The industry continued to labor to grow production and reserves,” Arthur Smith, chairman of John S. Herold, said in the report. “The potential for stormy seas looms.”
(31 Oct 2006)

Estimated U.S. drilling activity hits 21-year high
energy API
U.S. drilling estimates in the third quarter of 2006 show that the U.S. drilling pace remains strong, with nearly twice the level of activity recorded during the lows of the early to mid-1990s, API reported.

According to API’s 2006 Quarterly Well Completion Report: Third Quarter, a 21-year high estimated 37,261 oil wells, natural gas wells and dry holes were completed in the first three quarters of 2006. In the third quarter alone, there were an estimated 12,687 completions. This figure is the highest single quarter estimate since the first quarter of 1986 and the twelfth consecutive quarter of increases in estimated U.S. drilling activity.
(20 Oct 2006)
As the size of remaining wells decreases, ever more drilling is required. -AF

Canada: Forecast predicts energy exploration will decline in 2007
Vancouver Sun
Gas and oil exploration activity will decline next year for the first time since 2002, the Petroleum Services Association of Canada says in a 2007 forecast released today.

The association predicts a rise in crude oil drilling, but warns that natural gas exploration will take a “significant drop” because of a surplus of gas in storage in Canada and the United States at the commencement of the 2006-2007 winter heating season.
(1 Nov 2006)