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Originally Posted by retx
its funny you say these two things in the same forum. im not being mean, but do you have any idea how or why those "dry" wells from the 60's and 70's are pumping again? what about how much they are producing? well i do. it just so happens to be the work that my girlfriend is doing now. its called co2 flooding and water injection. take an old well. remove the rig, fill it with co2 or water, concrete cap it and sit on it for a few years. the injection helps the oil loosen up from the rock, sand or shale that made it nearly impossible to extract. those wells went "dry" because they were too expensive to run for the amount of energy they produced. and thats what we are seeing today. wells that are just 10 years old becoming to expensive to operate. again....one day it will not be cost effective to explore, drill, pump, ship and refine oil. those wells didnt magically start filling up again. it has taken new techniques to gain access to that oil deep within the earth. and its a very expensive one. we are seeing the price increase from such procedures. only 2 companies are doing this. one in texas, and one based in norway.
and its odd you think that no company would want to purchase something and sit on it for any length of time before selling it. thats exactly what these companies are doing. it takes years for these "dry" wells to start pumping again. and at very little per day output too. its a game of who has the last bit of oil. if you believe there is no shortage of oil, then why would a company spend millions of dollars on the research and development of such technology, just to obtain a very minute amount of oil when they could spend a lot less and get it elsewhere. and why is offshore drilling, which happens to be THE most expensive, becoming the status quo? because we are running out of oil, both domestic and globally. sorry to sound like the boy who cried wolf...but.
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Bottom line is that it was too expensive yesterday. However with today's technology, price and what not, it is economical again, right? That was the point I was making. Further to that, it is taking new and expensive techniques in TODAY's light. In YESTERDAY's light it was unprofitable and even unfeasible. Oil is there. It is just hard to get to with TODAY's technology, is my point. I priceda digital watch with time, month and date when they first came out. They were way too expensive foir me to own AT THAT TIME. Today we are buying them for $10 or less at Wal*Mart and they can do more.
I am not saying that NO company would. However it takes a certain type of comapany to do it. For the major oil companies, it is an investment. How much does a "dry" well go for? Probably not as much as a producing one, just based on a guess. They have enough capital and can write off things like these so it makes it worthwhile to buy and keep. However, for smaller shops, it would be harder to get them to tie up a bunch of money to do that. Exxon Mobil can invest in more things than we can. Let me ask you this, would you buy a product that you can sell one of every month and tie up inventory or would you rather buy a product you can sell 5 of every day? I don't KNOW if there is a shortage of oil. I read an article that mentioned that even BEFORE the first well was sunk, it was predicted to run out after X years. At the rate we use it, will it run out? Yes. When? Who knows? I don't. So far I have seen a lot of SWAGs. Yes, these companies are hedging their bets but it is feasible for them. Smaller companies may not be able to because of the capital.