Monday, August 18, 2008

Interesting thimgs,,,Oil Profits

The following is an excerpt from an article by Newt Gingrich and Roy Innis. Newt's name I know, Roy I don't. The next time you see an add about oil company's "obscene" profits, do the math and see how many wells the money will provide. Then consider that not all wells produce enough to make money.

In one example, Shell Oil and its partners leased an area in 7800 feet of water 200 miles off the Texas coast. They spent five years exploring and evaluating the area, punched several “dry holes,” and finally drilled a discovery well in 2002. Three appraisal wells (at $100 million apiece) confirmed a major field, and in 2006 the company ordered a huge floating platform and pipeline system that will initiate production in 2010. Total investment: $3+ billion.

I do not own one share of oil stock(I should be so lucky) but I understand, no profits no drilling.

The link; http://townhall.com/Columnists/RoyInnisandNewtGingrich/2008/08/17/idle_leases_-_or_addled_minds

2 comments:

Hammer said...

Even when they hit a gusher it takes years for the profits to start trickling in.

Ed said...

Roy Innis is best known as the head of the Congress of Racial Equality and as a 2nd amendment advocate.