Open Choke is the nom de plume of an anonymous oil and gas industry executive.
Open Choke's ideas and opinions do not necessarily represent the ideas or opinions of Drillinginfo.com, its owners, or employees.
Two white shoe firm attorneys I slightly know were at the next table to me at lunch talking about how Climate Change litigation will be 10 times the size of tobacco litigation. Crap. That is even worse than Kyoto. Instead of flushing it down a UN rathole, we manufacture more litigator billionaires. No wonder the democrats are all over this issue. I'm feeling japanese, you know I'm feeling japanese, I really think so.
I had a great time, saw a bunch of old friends, ate sauteed grasshoppers at Hugo's, and saw some very interesting deals. A million-two dry hole cost wildcat targetting clastic fans off the eastern side of the Mexia Talco fault zone in Milam Co. offset and updip of log Claytie's big Cotton Valley Reef well, with a log showing the "reef" to be a big, nice clastics dump instead of a reef...
I saw an interesting Smackover deal... of course, I love Smackover deals. I am a sucker for strat traps. I have never really DRILLED a Smackover deal, but I love 'em anyway. Someday... as long as they aren't sour, which really limits me. Another group had a big acreage package in the southern part of the Delaware scooting over into the Val Verde targeting debris flows on the western side of the Central Basin Platform, and genetically tying in Haley field down and around to, presumably, the Wolfberrry in Crockett and Upton Co.s. They told me that they had sold half their posituion already to SandRidge. I could have spent millions in there.
Technology wise, there was a company there that was doing basin analysis with digitized gamma ray logs... It was amazing to see... clinoforms, unconformities, it was a sequence stratigraphers dream. Things hard to see on a log by log basis hitting you in the face using bulk visualization technology.
Drillinginfo, my kindly sponsor on this blog, had the only immediate money making thing I have ever seen in a software data package... Their new Land Trac add on is, in one word, incredible. Instantly seeing which leases are expiring in hot plays without being drilled or drilled with dry holes, being able to instantly see if a lease was in jeopardy with a faltering well, being able to see, in bulk, who is making assignments to who without going to a courthouse and actually collecting assignments, seeing the dang instrument online for God's sake (editors note: only the first page is available, to get the whole instrument, use the volume/page ID and call the county clerk), is gonna get me a position in the Barnett or the Woodford after all. I am going out today to make some deals. This dang Drillinginfo has paid for itself at least 10,000 times over in my shop. We literally couldn't live without it. I hope they don't read this and raise my price!
...and the livin' is easy. Going downtown this afternoon to rub shoulders with 6 thousand of my brother oilme... people. My folks are working on maps and presentations for our booth where we are selling a couple of great ***** deals. You gotta love it. For those not familiar with it, the North American Prospect Expo is a gathering of the tribes every early February... some 12-14 thousand oilmen, in Houston, TX. A good venue to wear button pocket pants in your wallet pocket. Just kidding. It's new little brother is Summer NAPE... Thursday and Friday at George R. Brown.
In the old days, the blow out was the Offshore Technology Conference. It was rumored to be the number one destination for prostitutes from all over the US. Parties galore. I was a young 'un back then, with not much budget authority, but those parties at the Shamrock and assorted venues around town are tattooed in my memory. When I have lost all my short term memory and am one of those folks smilin' and droolin' in their wheelchair, you will know what I am thinking about...
Today, it is the same cast of characters. Our industry had what China is gonna have with its one child policy... a demographic catastrophe. By not hiring young people for more than 15 years, we created a huge hole, and it has been hell re-priming the pump at graduate schools to entice young people back into this industry.
Of course, nothing more sweet than seeing ten thousand geriatrics hitting the strip bars and hammering the cocktails. Kinda like Golden Girls except with Men, and a whole lot of them. In any case, I will try to post from the floor. Maria Bartaromo is the Money Honey, who is our Oily Goily?
Citizens don't seem to understand that bio-fuels and oil and gas are merely different forms of solar energy converted to and stored in a form that allows us use it with incredible efficiency AND the timing for which to use it, kind of like organic batteries. The only physical difference between Bio-Fuels and Oil and Gas is the BTU efficiency of each (how many BTU's do we spend to get a BTU? If it is more thatn one, it is a NOT a source of energy. if it is less than one, it is) and turn-around manufacturing time... millions of years versus several months.
So, our self designated energy ethicists have created two dimensions of "goodosity". One axis is carbon footprint, and the other a nebulous and undefinable term called "sustainability". Prior to the last decade, the carbon footprint axis didn't exist. It is still a very open debate as to whether this is an appropriate axis for "goodosity".
If we could create oil and gas from turkey carcasses or landfills, which WE ALRADY DO, that would be defined in this two dimensional ethical structure as GOOD Oil and Gas in the "sustainable" axis because we can create a lot of landfills and kill a lot of poultry in a timely fashion. The methane from landfills is "good" on both sustainable and carbon axis. Of course, we can take this construct, and we can add more axis... more dimensions, which equals more dementia. If we are vegans, then the turkey carcass oil plots very badly on that axis. It doesn't take too many of these ethical axes before you are plumb out of "appropriate" energy altogether at any price. Physical laws don't respect human laws, and when human rules contradict physical laws, I don't need to tell you which ones prevail.
So, lets examine the "sustainability" ethic. Exactly how much fossil supply do you need before you become "sustainable"? For instance, the sun is finite and fossil, but we have billions of years of it in the future, so not something we should concern ourself with. For our purposes, it is sustainable. Given that we, as a species, has been around 200,000 years, I would feel comfortable saying a 200,000 year supply is "sustainable". Given the developments of the last Century, ie commercial flight, nuclear power, incredible increases in manufacturing and agricultural output, ad infinitum, I would be willing to say that a couple of hundred years means "sustainable". Does anyone really think we will have gasoline powered vehicles in 2150? If oil and gas have a 200 year supply, is it not "sustainable"?
Funny how this histrionic debate is really only about a TIME scale!
Reasons given are: 1. Higher corn prices and loss of corn as a food source due to ethanol subsidies, 2. Tougher enforcement of immigration laws (strangely enough, I talked about the inflationary pressure of the illegal crackdown in my July 4th column http://openchoke.blogs.com/open_choke/2007/07/illegal-america.html), 3. A late spring freeze, (uhhh, global warming?) , 4. High diesel prices due to our long term energy policy of beating the bulk of US energy providers about the head with a ball peen hammer while masturbating to the idea of free candy canes falling from the sky, and 5. the hammering of the dollar, which makes our commodities so much more attractive to pesky furners.
So, enjoy your "consumer price index" of 2.7% while your food costs goes up 25%. On the bright side, at least this year, the price of oil and gas is flat after growing 35% per year between 2004 and 2006. No inflation due to us THIS year! Oh yeah, I forgot. We are not in the Consumer Price Index.
In any case, maybe consumer pain and anger will be refocused by the media this year on that other necessity- food! Maybe the Government should "do something about it"? Isn't that what the guy at the gas pump on TV always says? What do they tell the mom in the kitchen on the TV segment as her kids have to eat Wal Mart inhouse brand out flakes without milk? "Look what the government did to you"?
Maybe a Windfall Profits tax on agricultural products? I mean, those poor guys have less of a choice to do that business than us! Perfect tax monkeys!
The good news on the inflationary front is that if you live in California, you won't be feeling that inflation like the rest of us, because you can offset the increase in the cost of your food with the decrease in the value of your house, you lucky son of a gun!
In any case, all we need to figure out is how to eat Asian electronic equipment, and food inflation goes away altogether!
The US Government released a statement today stating that test pilot Stephen Austin, who was critically injured in a near space aircraft crash, was being considered for bionic reconstruction.
"We can rebuild him. Make him faster, stronger... better!" said Oscar Goldman, a representative of a yet unnamed government agency lobbying congress for the funds. "Unfortunately, with the cost of healthcare today, it will be some $26 billion dollars... more than the entire budget for our off the books agency, even if we take out our satellite program".
Canada, trumpeting it's low cost healthcare system, had Douglas J. McKenzie spokesman for the Royal Canadian Secret Spy and Projects Ministry tell the press that "We can get this done for $6 million loonies... which today are worth nearly as much as dollars. Unfortunately, it will take 137 years".