An extended-reach litmus test is on the horizon, as Benton Oil & Gas receives California state approval to drill as far out as 3.5 miles under the Santa Barbara Channel using an onshore drill site. $$ Meanwhile, Conoco receives a permit from the state of Utah to drill on a state lease in Reese Canyon in the Grand Staircase Escalante National Monument on leases Conoco has owned for almost ten years. $$ Nymex’s first year of electricity futures/options trading exceeded expectations according to Nymex President Patrick Thompson, speaking from the new Nymex office in Houston, which Thompson claims is positioned to become “the hub of the electricity industry.” $$ Twenty Greenpeace activists scale BP’s building in Aberdeen to install a rooftop solar array, purchased from BP, and to erect a banner reading “BP, solar not oil.”
Light sweet crude oil - $19.75/bbl; Natural gas - $1.90/MMbtu; U.S. active rig count – 918
Despite the slow pace of new contract negotiation and award, and despite the continuance of U.S. sanctions, Libya continues to rank as the country most favored by international oil companies for new exploration and production investment in 2002, according to a recent survey conducted by a UK consultancy. $$ Brigham O&G of Austin reports losing surface control while drilling a natural gas development well in Matagorda County, Texas. The well is the first offset to the field’s discovery well, the Staubach No. 1 (Could it be “Roger the dodger?”). $$ China’s Sinopec reports plans to build 450 retail gasoline stations with foreign companies this year, as China lifts the ban on foreign investment in the retail fuels business. Ultimately, there will be about 1,500 such stations to be built in conjunction with Royal Dutch Shell, ExxonMobil, and BP. $$ A drought on the U.S. East Coast drives up natural gas prices. How you say? The drought has led to the loss of hydroelectric power and has even impacted nuclear power generation, with its reliance on fresh water for cooling.
Light sweet crude oil - $25.56/bbl; Natural gas - $3.44/MMbtu; U.S. active rig count – 749
In the first such agreement in the Western Hemisphere, Venezuelan President Hugo Chavez and Trinidad and Tobago Prime Minister Patrick Manning sign an agreement to jointly develop the estimated 30 tcf of natural gas in offshore fields straddling the borders of the two nations. $$ Composite Energy, a Scottish company, commissions a 2-yr study to evaluate the potential of methane production from coal beds, followed by CO2 storage in the evacuated coal beds, thus taking advantage of the property of coal to typically absorb five times more CO2 than the methane it releases. $$ Chevron and Weyerhaeuser report plans to jointly assess the feasibility of commercializing biofuels production from nonfood cellulose sources. Chevron is deeply involved with biofuels research through alliances with Georgia Tech, University of California at Davis, the Colorado Center for Biorefining and Biofuels, and the DOE.
Light sweet crude oil - $62.85/bbl; Natural gas - $7.80/MMbtu; U.S. active rig count – 1,758
The Rest of the Yarn
This month we continue our look-back at the life and times of Sid Richardson, one of the “Big Four” oilmen who laid the foundations of a flamboyant lifestyle that would come to define the image of Texas Oil.
While East Texas made fortunes for Murchison, Hunt, and other oilmen, it ruined Sid Richardson. With prices for its high-quality crude driven as low as ten cents a barrel, the majors saw little reason to buy the remote, sulfur-laden West Texas oil Richardson was selling. Cash from his best wells in Ward County shriveled to almost nothing. In January 1930 his income was twenty-five thousand dollars a month; by December, it had fallen to sixteen hundred dollars a month, and the banks took every cent.
In a matter of months Richardson went from the penthouse to the outhouse—literally. He moved out of his top-floor suite at the Blackstone Hotel into a forty-dollar-a-month maid’s room. When he couldn’t afford that, he moved into a twenty-five-dollar-a-month room at the Texas Hotel; when he couldn’t afford even that, he was evicted and sued for back rent, at which point one of his closest friends, Amon Carter, publisher of the Fort Worth newspaper, gave him a room at the Fort Worth Club for free. When he was evicted from his office, Richardson set up business at a downtown drugstore. If he was out, a soda jerk named Jack Collier answered the pay phone, “Sid Richardson’s office.”
His only hope was to find more oil. Murchison begged him to come to East Texas, but he refused, since all his leases and contacts remained in remote Ward and Winkler Counties on the New Mexico border. He was determined to keep drilling, but his credit at West Texas oil-supply stores was running low. When the inn in Monahans threw him out, he fled to the new hotel in Kermit. When the Kermit hotel threw him out, Richardson resorted to bunking at a ranch outside of town. In desperation he resorted to paying his men with groceries and the promise of an eventual paycheck. During the Depression, poor-boys like Richardson paid drillers and tool-pushers ten to twelve dollars a day in oil. If none was found, they received whatever the wildcatter could come up with. Richardson, who kept a chronically overdue account at the general store in Kermit, became renowned for paying his men in bread, eggs, or milk—whatever they would eat.
Next month Sid Richardson extends his credit to the limit and then finds a new wealthy partner willing to bankroll him. (Article excerpted from “The Big Rich.”)
In 2002, how many retail gasoline stations were there in China: a) 75,000, b) 125,000, c) 210,000, d) 260,000?
If you would like to participate in this month’s quiz, e-mail your answer to firstname.lastname@example.org by noon March 15. The winner, who will be chosen randomly from all correct answers, will receive a $50 gift card to a nice restaurant.
Answer to March's Quiz
The first horizontal oil well was drilled near Texon, Texas in 1929.
Answer to February's Quiz
In 1959, Texaco overtook Standard Oil of New Jersey as the nation’s largest crude producer.
Congratulations to February’s winner – David Lindley with Crossroads Energy Partners, LLC