Muscle Heads Rejoice!

Chevron says Gulf drilling a success

Well could become the nation's biggest new domestic source of oil, according to newspaper report. September 5 2006: 12:36 PM EDT

NEW YORK (Reuters) -- Chevron Corp. said Tuesday it had successfully drilled for oil in the Gulf of Mexico's deep waters, in what could be one of the most significant finds for the domestic oil industry in a generation.

The successful well, known as Jack 2, reached a record total depth of

28,175 feet, coming in 7,000 feet of water and more than 20,000 feet under the sea floor. Analysts said the find suggested the success of that drilling may mean more oil than previously believed is available under the Gulf of Mexico, a region that already provides a quarter of U.S. output. In Focus: Energy Betting billions on liquefied natural gas Slacking crude reserves and rising demand are driving what some are calling one of the biggest investment trends in the world. (more) Bailing on Big Oil Oil stocks just won't quit, but with crude prices slowing along with the economy, is now the time to sell? (more)

One published report suggested the breakthrough could increase U.S. oil reserves by as much as 50 percent.

During the test at record depths and pressure, the Jack No. 2 well flowed at more than 6,000 barrels of crude per day, Chevron (Charts) said. That puts it on a par with discoveries in exploration hot spots such as the waters off Angola.

With U.S. oil output in decline, big new fields are increasingly rare, and oil companies are widening their search to more difficult places

Chevron, the No. 2 U.S. oil company after Exxon Mobil (Charts), did not give an estimate of the field's reserves.

The Wall Street Journal cited Chevron officials as estimating recent discoveries in the Gulf of Mexico could hold as much as 15 billion barrels of oil and gas reserves. That would boost U.S. current reserves by 50 percent.

The region could become the nation's biggest new domestic source of oil since the discovery of Alaska's North Slope more than a generation ago, the Journal said.

"This region is proving quite prospective. Certainly the test well results are on the top end of most analysts' ranges," said Jason Kenney, an analyst at ING in London.

Mike Wittner of investment bank Calyon cautioned that until the size of the field was known it was difficult to draw conclusions.

"It seems to be a significant find and there is still life left in the deepwater Gulf of Mexico, particularly as you move into ultra-deep water," he added.

Chevron is the operator of the Jack prospect with a 50 percent working interest. Devon Energy (Charts) and Statoil (Charts) each own a 25 percent working interest.

"The results of the Jack test allow Chevron and its co-owners to better understand the deliverability of the emerging lower tertiary trend, a trend where Chevron is the largest leaseholder," said Gary Luquette, Chevron's President, North America Exploration and Production.

Chevron was not immediately available for further comment.

Chevron first announced the discovery of the Jack prospect in September

2004. It is 270 miles southwest of New Orleans and 175 miles offshore. The test on Jack 2 broke Chevron's 2004 Tahiti well-test record as the deepest successful well test in the Gulf of Mexico.

More than half a dozen world records for test equipment pressure, depth and duration in deep water were set during the Jack well test, Chevron said.

Chevron and its co-owners plan to drill an additional appraisal well in

2007.

Chevron said it is the largest leaseholder in the deepwater Gulf of Mexico and is currently developing the $3.5 billion Tahiti project, scheduled to commence production in 2008.

Reply to
NoOption5L
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SNIP

Wait until they discover that all that oil is what lubricates the tectonic plates, thus preventing far more severe quakes and tsunamis..... :0(

Reply to
veegerNO SPAM

It doesn't mean the price of gas will go down. It may go up slower though.

Reply to
Mark C.

There's more than enough oil in the world. The problem is artificially created by constricting gasoline supply and oil that remains off the market. Basically it's a market that runs on the hairy edge by design so any burp in world events or weather or just plain neglect sends prices higher. Why by design? Because that's how profits are maximized and it's not like anyone else can just get in on the game with all the regulations.

Reply to
Brent P

snipped-for-privacy@yahoo.com (Brent P) wrote in news:--ednTNij_0zrGPZnZ2dnUVZ snipped-for-privacy@comcast.com:

a) The find is good, but it's a drop in the bucket compared to what America consumes.

b) I agree that there's plenty of oil to go around for a long time, but it's getting more costly to locate, extract, and refine for consumer use.

Joe Calypso Green '93 5.0 LX AOD hatch with a few goodies Black '03 Dakota 5.9 R/T CC

Reply to
Joe

As I heard it, it's about a 50% increase in US reserves.

All that matters is profitable. at anything north of US$40 a barrel and there is glut of oil available.

Reply to
Brent P

All this is premature speculation it takes months for them to determine how much oil we are talking about. That can be a good or bad thing but in my mind it's a false sense of hope that prevents us from finding an alternative means of energy until we know for sure.

Reply to
Nicholas Anthony

snipped-for-privacy@yahoo.com (Brent P) wrote in news:- rKdndkDldbhS2PZnZ2dnUVZ snipped-for-privacy@comcast.com:

artificially

maximized

Yes, and our reserves in general constitute a drop in the bucket compared to what we consume. I can't recall the figures, but I read a while back (around when Dubya was considering opening up more of the reserves to consumers) that if we relied strictly on our reserves, we'd be out of oil in a matter of months.

Indeed. And while the oil companies post astronomical profits, we just keep on paying. I hope I get to see the person who brings a truly viable alternative fuel to the masses in my lifetime. That person will make Bill Gates anonymous.

Reply to
Joe

You are confusing what we stash ready to use in case of a crisis or emergency with what we still have in the ground. It would take 40 years for us to go through the oil that was recently found in that one location in the Gulf if the estimates are accurate. Perhaps its less or even more, it takes months to get a precise amount.

Hold up the Government makes a huge percentage off of the oil from taxes and they are enjoying this more then the oil companies themselves. I do agree who ever comes up with whatever replaces this fuel source would insanely wealthy making Bill Gates look poor.

Reply to
Nicholas Anthony

"Nicholas Anthony" wrote in news:1OgMg.99$ snipped-for-privacy@newsfe09.lga:

No, by 'reserves' I mean what's ready to go right now. The stash. As for what we can refine, that takes a while to get to the pumps. At the current rate of delivery, there ain't nowhere near enough to go around.

Hope I see it in my lifetime.

Reply to
Joe

People have totally lost perspective. After adjusting for inflation the cost is not much different from earlier days when no one thought gas was particularly expensive. In the mid-60's gas was 0.25 per gallon and a typical car cost $2500. Today the typical car is about $25,000 and gas costs $2.50 . No one complained in the 60's but you'd think people where having the leg cut off the way they complain now.

Reply to
Ashton Crusher

Forty years from the Gulf? No. About five. I live in Calgary and I know - remember us, we're the ones who keep all you Americans warm in the winter. We can't sell you guys the stuff fast enough, and our province (state) runs multi-billion dollar surpluses every year right now. We're a lot like Alaska. (Except Alberta has more heavy oil than Saudi does light crude.) Yea for us.

One out of every seven barrels of oil produced in the world is consumed in the United States. That's a fact. The US accounts for what, 5 to 6% of the world population, but you use 14% of the oil. To say you're dependent is an understatement.

Yes, there is enough oil to go around at present consumption rates for maybe

40 years, maybe 80, it's hard to tell, so say the petroleum engineers I know, who are most certainly in the know.

Fact is, the price is only going to go up. And that's up from this point. (It was artifically low for many years during the 80s and 90s.) At some point it will become too expensive to pull from the ground.

There is no reason to rejoice. Save this post and send it to me in 20 years. You'll probably even be able to do it from your new 2026 Toyota electric car. Hey, maybe you can at least but it with the optional 8-battery engine.

Brad

Reply to
BradandBrooks

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