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This meeting was particularly interesting because a major variable in the valuation of Delta is whether off-shore Califonia Federal leases will be allowed to be developed . There is close to a 3B$ swing from resource utilization to Taken $$ to essentially purchase back all the oil on the notion of NEVER using it , and , by implication , buying foreign oil to replace it .
It all depends on whether Bush or Gore is elected .
I asked Roger whether Californians might come to understand reality . He has his doubts .
However , he indicates that no variation in US production would substantially impact OPEC`s price setting dominence .
Before lunch , I chatted with Roger about why oil had been SO low a year and a half ago , down to around 10$ % Brl . He had the first at least partial explanation that I`ve heard . Apparently , there was Common Wisdom in the market that there existed a phantom float of about 300M Brls supply out in the world market somewhere . As it became clear the above ground reserves didn`t exist , prices have returned to more rational levels . I commented about Harken`s comments on the EPAing out of existance of local storage around US , particularly the North East , converting the industry to a Just In Time business making it much more prone to supply volitility .
The consensus seems to be that Oil will settle down to around $27 for the next few years .
============================: TUE.SEP,000912 :============================12| Roger Parker , WallSt/DeltaPetroleum @ DaTomasso 903 8th > 53 . RSVP Richard Gersh |12:0| NASD sml cap : 45$ . working to grow to $100M MktCap critical mass for property acq domestic , CA - ND . Perminan @ W TX & MX , SantaBarbara Chnl . SB chnl drilled 15 yrs ago . some devel since . `90s US & CA EPA delayed devel : No New Platforms near shore or refineries on | data : Dep Int COOGER study of reserves . Total 1B Bl , Delta 90M of that . Had to file new dev plans . Shell , "Neuevo"(?) filed . If Al Gore elected - no new drilling . Govt w have to buy back Leases , else a 5th ammendment "Taking" . 1.2B$ to all interests | 1.2 x .09 |>| 0.11 | $110M is DPTR share . all is public knowledge . Clinton saying "no new leases" . If Bush wins , they likely to be developed . Handsome payoff either way ; most if Govt buys rather than develop . Can start developing 2001 from existing platforms . If Dems win , < 161M . most likely - .5 .6 on $ = 80 - 100M$ if interior & CA buy . CA has surplus cash . Minerals management service payment credits . or sell to larger Cos . Else , dev required to start . All EPA studies already done . most favorable to have leases bought back . Grey Davis had 1 hr prime time : Party of ed , healthcare & no new drillings off shore . If go forward , what cash call in nxt 5 yrs . Own producing Rocky pnt unit . | 8M$ x 14 , .25 interest | produce 3-5 M B % day , most oo $-flow . Plains resurses oporatien , Ptnrs : Tx , Koch industries , others . 90M BB recoverable proven . 7-10 $ % share buyback cost if Gore wins . Have avoided dilution over last 2 yrs . Stock price twoo . W sue for Takings for total recoverable . Supreem court upheld contracts . Presant valu base on 12$ % bb ( $23 Value $63M . discounted @ .1 | today would use $25 %bl have increased revs thru acqs . ND | Sega pending @ 5$% shr . ~ mkt . Saga LLC is operating entity . prvd 6.9B prvde producing . + 7 paid 7 - 3 $ % bbl for TX . .70 oil .3 gas | Ridder Scott estimates . | arev producin 1750 b%d ex Plains . believe can increas Saga production 500 b%d . Pat & Boggs Lobbiests for Oil Industry : Settlemnt by inauguration day paid %st half `91 . DoI . Jun 1 deecision mandatoriy . else Takings . In Ct 5 more yrs ? Unlikely given very recent precident . Are Fedral Leases . . Saga 600 wells , now much staff needed ? 15 res & prod goelogists , ex - plains . plan to retain all . 30 field personel in TX & MX . |
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