Company Touts Central Utah Oil Discovery(BILLION BARRELS!)

The Spokesman-Review.com ^ | May 4, 2005 | Paul Foy

[kellynla]

SALT LAKE CITY (AP) — A tiny oil company has snapped up leasing rights to a half-million acres in central Utah that it says could yield a billion barrels or more of oil.

Geologists are calling it a spectacular find — the largest onshore discovery in at least 30 years, located in a region of complex geology long abandoned for exploration by major oil companies. It’s turning out to contain high-quality oil already commanding a premium at Salt Lake refineries.

With the secret out, industry players expect a bidding war to break out at the next Utah leasing auction, set for May 17 in Salt Lake City.

At today’s prices the oil reserve could bring Utah $5.6 billion in royalties, state auditors conservatively estimate. Although the discovery is still playing out, the oil will take years to recover and some skeptics question the company’s projections for a region yet to be fully surveyed.

“It’s just very highly unlikely because the U.S. onshore has been picked clean, if you will,” said Fadel Gheit, senior oil analyst at Oppenheimer & Co. in New York.

[MARTIAL MONK]

Quit that! You sound like my ecomonics professer (may he burn in statistical Hell). He made my head hurt worse than a 12 pack of Pabst. OPEC can compensate but not control. 1% reduces leverages, not in the 1-100 scale, but in the 1-6% shortfall range that is statistically significant.

There are a dozen refineries within trucking distance of this field. That won't sustain a major find (which this probably isn't) but it could let these guys ride a tight market, especially with quality crude.

There is the story of the college kid who, during the shortages of the seventies, would call the small refineries and ask them if they had any extra crude. A surprising number said "yes". He would then call other refineries until he found one with extra capacity. He made a fortune brokering small lots and retired before he passed his 300 level courses.

[chuckles]

A few weeks ago people were crying for Bush just to stop filling the SOR. That's 700K barrels a MONTH( not a day). Now, a billion barrels ain't enough to lower the price? If there is that much oil, it will be flowing in a few months(b4 summer is over). Don't forget drilling goes on every day somewhere and this will definatley help if there is that much of it.

I may go pick up a cheap SUV now before the rush.

[GGpaX4DumpedTea]

"That is only part of the problem."

Obviously OPEC would rather sell half as much oil for 5 times the price. The other part of the problem is that OPEC has to a great extent lost control of pricing issues. These are as much decided by traders as by the producers, and the only future for the traders is to have the prices go up.

The only problem OPEC might have with this is that eventually these high prices will be incentive to develop real alternatives to OPEC dependency. We should be giving major publicity every day to news about progress (assuming there is some) in developing these viable alternatives.

[InvisibleChurch]

Man, I wish that I had bought those leasing rights. I'd sell them and get a new car and stuff.

[Bear_Slayer]

Probably drilled into a pipeline.

I guy that I went to high-school with, and a local business man were arrested in the early 80s for siphoning off Arco oil from a pipeline and then selling in back to them.

[goldstategop]

With a trillion barrels of recoverable oil, who needs the Saudis? We could abolish the income tax and give every American a share in the revenue. We'd become Super-OPEC. Hey an American can dream can't he? ;-)

(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)

[jaydubya2]

There is a Wolverine Pipline that starts in Canada, passes through the Detroit area, accross Michigan, into northern Indiana, then into Illinois. I don't know if thats the same outfit but they are in oil anyway.

[Brilliant]

I don't think it can be the same. Something I read says they have only a few dozen employees.

[Mind-numbed Robot]

I guy that I went to high-school with, and a local business man were arrested in the early 80s for siphoning off Arco oil from a pipeline and then selling in back to them.

The ultimate buy low sell high scheme. :-)

[Bear_Slayer]

The ultimate buy low sell high scheme. :-)

I suspect the price was higher than they thought and not one I would wish to pay.

[SunkenCiv]

a Grand Rapids Michigan ping. :') And another Utah link, for the halibut.

Utah sits on huge oil reserve
Springville Herald | April 21, 2005
Posted on 04/21/2005 2:56:45 AM PDT by RWR8189
http://www.freerepublic.com/focus/f-news/1388012/posts