I have a neighbor who works for Chevron as a contractor. He said 3 years ago, the cost to get a barrel of oil out of the ground, was $8.75. Today, he said the cost is probably the same. Even if it's doubled, that's only $17.50. He said the current price of $120/barrel is ridiculous.

He also said they're finding oil everywhere they drill, and they're not even into high waters yet. I said maybe the refineries are the hold up, but he said their storage tanks are full the brim. He said we have to wait for the price to come down, or for people to use it, so we can make more gasoline. We can't even make any more, we have so much on hand.

He thinks the disparity in reality to sanity, are the stock traders in NY driving the price up, political stuff, and taxes.

jeff

whoa there...

That's when you actually strike oil and start pumping it out.

There's alot of money dumped in trying to find it, many times independent oilmen spend 5 dollars a foot (not sure the exact amount) for thousands of feet only to come back with a dry hole.

Paying geologists to sit out there, find the stuff, and paying for the mineral rights is another consideration.

The actual costs are quite a bit more, but you're right about the refineries. I remember some of my dad's friends losing their a$$es 10 years ago when oil was cheap, but not $10 a barrell cheap. The ones that kept in the business are loaded now.

This is an open discussion topic, btw.

__________________
1985 500SL Euro w/ AMG bits 130k
1984 300SD Turbodiesel 192k
1980 240D Stick China 188k
2001 CLK55 AMG 101k
2007 S600 Biturbo 149k Overheated Project, IT'S ALIVE!!!

Yeah, I worked on the drilling rigs in Wyo in the early '80s, and I can tell you that $8.75 a barrel cost HAS to be for completed, producing wells.

Over 25 years ago, the cost for keeping a rig operating and "makin' hole" was several THOUSAND dollars a day - and that was just to punch the hole - that might or might not end up producing anything.

Once the hole is drilled and the pumping starts, then I can believe $10-$20 a barrel to get it out of the ground and to the refinery. But by the time you get to that point you've already spent hundreds of thousands - maybe even millions - of dollars....

__________________
1984 300 Coupe TurboDiesel
Silver blue paint over navy blue interior
2nd owner & 2nd engine in an otherwise
99% original unmolested car
~210k miles on the clock

1986 Ford F250 4x4 Supercab
Charcoal & blue two tone paint over burgundy interior
Banks turbo, DRW, ZF-5 & SMF conversion
152k on the clock - actual mileage unknown

for a project in LA (not Los Angeles). 10% of residual return but the $150-180K per week is what kept me out. And THAT is drilling ONLY. Even though it would be split 10 ways it still takes money to make money.

__________________
1987 300D (230,000 mi on a #14 head-watching the temp gauge and keeping the ghost in the machine)
Raleigh NC - Home of deep fried sushi!

The market is so overinflated that it will crash at some point, making speculators broke. I await the day...

__________________
1983 300D-Turbo - Deep Blue w Palomino MB Tex (total loss in fire 1/5/09 RIP)
1995 E320 W124 Polar White/Grey Mushroom MB Tex
2005 F150 Supercrew - Arizona Beige - Lear topper
1985 Piaggio Vespa T5 - Black and Chrome

www.cphilip.com

Not sure what you're saying about "10% of residual return", but if you're saying it costs $150-$180k a week to run a drilling rig, that's $21-$26k per day. Since 25 years of inflation have passed since my drilling days, I can buy that as being today's cost numbers.

__________________
1984 300 Coupe TurboDiesel
Silver blue paint over navy blue interior
2nd owner & 2nd engine in an otherwise
99% original unmolested car
~210k miles on the clock

1986 Ford F250 4x4 Supercab
Charcoal & blue two tone paint over burgundy interior
Banks turbo, DRW, ZF-5 & SMF conversion
152k on the clock - actual mileage unknown

Amen to THAT!!!

...and I'll laugh my arse off at every one of them as they go broke!

__________________
1984 300 Coupe TurboDiesel
Silver blue paint over navy blue interior
2nd owner & 2nd engine in an otherwise
99% original unmolested car
~210k miles on the clock

1986 Ford F250 4x4 Supercab
Charcoal & blue two tone paint over burgundy interior
Banks turbo, DRW, ZF-5 & SMF conversion
152k on the clock - actual mileage unknown

Man you said it!

__________________
1983 Euro 240D 277K
2016 Mazda 6
Coming Soon, 2013 Mercedes E350 Bluetec
Formers:
2012- Mazda 3
2007 Outlander- complete pile
1995 E300 Diesel 208K
2007 VW Passat 2.0T 63K SOLD
2003 Jaguar X-type 3.0 Sport Sold 04/11 w/88K
2009 Lexus RX350 9061 miles. Sold 04/09
2008 Mitsubishi Lancer GTS:Totaled Sept.,09 @ 24,000
2003 Infiniti I35 58K Sold
1984 300 turbo diesel 222K

I know, its getting VERY competitive for WVO around here.

Jeff, the "owners" of the oil get more these days, thanks to those speculators. Also, consumption is up, and projected to "boom". UIt hasnt "boomed" yet. And at various projections of global reserves, and the appropriate "boom" run rate, then you get a timeline.

Would agree with your Chevorn friend on the punching holes theory. I need to put some numbers down adn reckon it, but intend on a white paper entitle " The Billion Dollar Caribou". Essentially how much each caribou or natural inhabitant is worth in, and around, US shores and land, as opposed to sending our troops to defend supply abroad, and spending inordinate amounts on aid and materials/transport.

Now, you call me an environmentalist, A Safari Club member says it best, but if those caribou are worth a billion dollars a head, US "leaders" ( term used loosely here) better get their intellect out their orifices and allow punching a boatload of holes ion "protected" lands. Better than war, conflict, and expensive foreign extensions.

Yes, you heard it here, the great white hunter, environmentalist, footprint sensitive biodieseler, if it means sending our sons and daughters abroad to defend suppplies, then screw that billion dollar caribou.

There is enough crude oil in ANWAR to satisfy U.S. demand for only 6 months.
Bush already opened up the National Petroleum Reserve Area in Northwest Alaska back in 2002.

Otto
'79 240D 4spd

part of this issue is that the good old dollar is not worth what it was on an international level. Look what a dollar buys overseas. not near what it did. So now their dollars are going further than ours in the international market.

__________________
83 300SD Dark Silver Dark brown inside

I would receive 10% of net after the well was sunk and productive. The rule of thumb was 'if we can get by under $20K we're doing real good' but you have to imagine that with a little cajun accent. Various forms of insurance were almost half of the total cost.

__________________
1987 300D (230,000 mi on a #14 head-watching the temp gauge and keeping the ghost in the machine)
Raleigh NC - Home of deep fried sushi!

Since 1931 when the first 44 wells were producing. 30 years and the pipeline is still running 'round the clock.

__________________
1987 300D (230,000 mi on a #14 head-watching the temp gauge and keeping the ghost in the machine)
Raleigh NC - Home of deep fried sushi!

We have a winner. Interest rates here are lowest in the world, and that doesn't help matters.

__________________
1987 300D (230,000 mi on a #14 head-watching the temp gauge and keeping the ghost in the machine)
Raleigh NC - Home of deep fried sushi!