Topic: LITTLE GUYS GET BIG BREAK: US OIL FIRM DRILLS IN CHINA
McWendy !m2cp3rR5zw started this discussion 8 years ago #69,371
A small, independent Louisiana oil and gas producer has learned that a little Southern hospitality can go a long way.
In this case, it took XCL Ltd. all the way to China's Bo Hai Bay, where the company's first exploration well is flowing 2,160 barrels a day.XCL is the first foreign oil company to be granted a risk-sharing contract to drill in Bo Hai Bay, part of the region where 90 percent of China's oil is produced. Although several major oil companies also are looking for oil in China, their activities have been limited to unexplored offshore areas of the South China Sea, or high-risk onshore prospects in western China.
Some estimates predict that XCL's Bo Hai Bay field could contain 500 million barrels of crude oil or more, but at minimum the well's success is an indication that the company is on the verge of a major energy development and will start commercial production by the end of 1995.
"We were looking at the world for places to drill, and we realized that China had the potential for developing large oil reserves," said Marsden W. Miller, XCL's chairman and chief executive. "They also have the demand. They will be importing oil this year."
Before going to China, XCL first developed a relationship with Taiwan's China Investment and Development Corp., that country's largest industrial concern, which bought a 5 percent interest in XCL. The Taiwanese, who are playing a growing financial and technological role in China's development, then introduced XCL to Chinese oil-industry officials, who were looking for smaller companies with high ability levels to drill onshore.
The company invited the Chinese officials to visit XCL headquarters in Lafayette, La., developing that relationship and showing them how their expertise in the region's ultra-shallow oil and gas fields could easily travel to China.
"We were able to convince them that Bo Hai Bay is very similar to the Gulf Coast of Louisiana," Mr. Miller said. "We spent three years building that relationship and negotiating the contract."
XCL had previously invested large sums in the modern hardware and software needed to reprocess seismic data into a form usable for oil exploration, technology XCL shared with the Chinese before any agreements were in place. Although the Chinese had good seismic information, much of it was antiquated and difficult to use, he said.
"We reprocessed a lot of their data to show them what we could do," said Mr. Miller. "They sent some of their top technicians to work with us for over a year. They used our information to find a very good discovery, and they developed a faith in our ability."
Under terms of the contract, XCL and its minority partner, Apache Corp. of Houston, committed to spend $6 million over three years, starting in May 1993. The partners are entitled to 49 percent of the field's crude-oil production, after development costs are repaid. XCL will receive 33 percent of production, while Apache will take 16 percent, for sale on the open market.
XCL plans to drill five exploration wells, two more than the contract requires, by the end of next summer. The next well will be drilled in September, to confirm the findings of the first test.
"If that works out as we expect, we will move immediately to a development program while drilling other exploration wells in the block," said Mr. Miller.
Founded in 1982 as The Exploration Company of Louisiana Inc., XCL already has been through one boom and bust cycle. After an initial $250,000 investment in U.S. Gulf Coast gas properties, the company grew to a market capitalization of $90 million, only to shrink as a potentially large Louisiana discovery failed to meet expectations.
Since then, however, successful gas production in South Texas and a
financial restructuring has buoyed the company's prospects, helping it to raise $25 million in a February stock offering. The company changed its name to XCL Ltd. in July, and trades on the American Stock Exchange under the symbol (XCL).
Although the company posted a $3.3 million loss in the first quarter, following losses of $15.2 million in 1993 and $23.9 million in 1992, the China discovery could bring it to profitability by the end of 1995 or early 1996, Mr. Miller said.
"Through a series of personal relationships, they've managed to acquire a property with a very high potential," said Charles M. Strain of Strain Consultants, Houston. "We estimate it could be as high as 500 million barrels. One hundred million barrels is considered a giant field, so that would be five giants."
"The government of China was surprised to find a small company that was so technically sophisticated," said Mr. Strain. "It's also a project that doesn't require a $10 billion to $20 billion investment, so that made it easier to use a smaller company. If a country can use a small company, it will. The oil majors can be very hard to deal with."
In this case, it took XCL Ltd. all the way to China's Bo Hai Bay, where the company's first exploration well is flowing 2,160 barrels a day.XCL is the first foreign oil company to be granted a risk-sharing contract to drill in Bo Hai Bay, part of the region where 90 percent of China's oil is produced. Although several major oil companies also are looking for oil in China, their activities have been limited to unexplored offshore areas of the South China Sea, or high-risk onshore prospects in western China.
Some estimates predict that XCL's Bo Hai Bay field could contain 500 million barrels of crude oil or more, but at minimum the well's success is an indication that the company is on the verge of a major energy development and will start commercial production by the end of 1995.
"We were looking at the world for places to drill, and we realized that China had the potential for developing large oil reserves," said Marsden W. Miller, XCL's chairman and chief executive. "They also have the demand. They will be importing oil this year."
Before going to China, XCL first developed a relationship with Taiwan's China Investment and Development Corp., that country's largest industrial concern, which bought a 5 percent interest in XCL. The Taiwanese, who are playing a growing financial and technological role in China's development, then introduced XCL to Chinese oil-industry officials, who were looking for smaller companies with high ability levels to drill onshore.
The company invited the Chinese officials to visit XCL headquarters in Lafayette, La., developing that relationship and showing them how their expertise in the region's ultra-shallow oil and gas fields could easily travel to China.
"We were able to convince them that Bo Hai Bay is very similar to the Gulf Coast of Louisiana," Mr. Miller said. "We spent three years building that relationship and negotiating the contract."
XCL had previously invested large sums in the modern hardware and software needed to reprocess seismic data into a form usable for oil exploration, technology XCL shared with the Chinese before any agreements were in place. Although the Chinese had good seismic information, much of it was antiquated and difficult to use, he said.
"We reprocessed a lot of their data to show them what we could do," said Mr. Miller. "They sent some of their top technicians to work with us for over a year. They used our information to find a very good discovery, and they developed a faith in our ability."
Under terms of the contract, XCL and its minority partner, Apache Corp. of Houston, committed to spend $6 million over three years, starting in May 1993. The partners are entitled to 49 percent of the field's crude-oil production, after development costs are repaid. XCL will receive 33 percent of production, while Apache will take 16 percent, for sale on the open market.
XCL plans to drill five exploration wells, two more than the contract requires, by the end of next summer. The next well will be drilled in September, to confirm the findings of the first test.
"If that works out as we expect, we will move immediately to a development program while drilling other exploration wells in the block," said Mr. Miller.
Founded in 1982 as The Exploration Company of Louisiana Inc., XCL already has been through one boom and bust cycle. After an initial $250,000 investment in U.S. Gulf Coast gas properties, the company grew to a market capitalization of $90 million, only to shrink as a potentially large Louisiana discovery failed to meet expectations.
Since then, however, successful gas production in South Texas and a
financial restructuring has buoyed the company's prospects, helping it to raise $25 million in a February stock offering. The company changed its name to XCL Ltd. in July, and trades on the American Stock Exchange under the symbol (XCL).
Although the company posted a $3.3 million loss in the first quarter, following losses of $15.2 million in 1993 and $23.9 million in 1992, the China discovery could bring it to profitability by the end of 1995 or early 1996, Mr. Miller said.
"Through a series of personal relationships, they've managed to acquire a property with a very high potential," said Charles M. Strain of Strain Consultants, Houston. "We estimate it could be as high as 500 million barrels. One hundred million barrels is considered a giant field, so that would be five giants."
"The government of China was surprised to find a small company that was so technically sophisticated," said Mr. Strain. "It's also a project that doesn't require a $10 billion to $20 billion investment, so that made it easier to use a smaller company. If a country can use a small company, it will. The oil majors can be very hard to deal with."
Anonymous B joined in and replied with this 8 years ago, 22 minutes later[^] [v] #840,010
tl/dr
Also, don't give a fuck. Fuck China.
Also, don't give a fuck. Fuck China.
Big Daddy Derek !Uvm54ORbmo joined in and replied with this 8 years ago, 1 minute later, 24 minutes after the original post[^] [v] #840,011
Anonymous D joined in and replied with this 8 years ago, 1 hour later, 2 hours after the original post[^] [v] #840,030
Marsden W. Miller Jr. resigned from XCL Ltd. on May 9, 2000.
Anonymous E joined in and replied with this 8 years ago, 21 minutes later, 2 hours after the original post[^] [v] #840,045
Topic is bull shit.
https://www.offshore-technology.com/projects/bohai-bay/
No mention of XCL listed in Independent exploration activities at end of article.
"Aside from partnerships CNOOC has conducted independent explorations in the Bohai Bay field."
https://www.offshore-technology.com/projects/bohai-bay/
No mention of XCL listed in Independent exploration activities at end of article.
"Aside from partnerships CNOOC has conducted independent explorations in the Bohai Bay field."
q. joined in and replied with this 8 years ago, 4 hours later, 6 hours after the original post[^] [v] #840,111
matt wd be filthy rich if that was true.
Washing-Up Liquid™ !jKwXp9RUNE joined in and replied with this 8 years ago, 51 seconds later, 6 hours after the original post[^] [v] #840,112
Literal obsession.
Anonymous H joined in and replied with this 8 years ago, 37 minutes later, 7 hours after the original post[^] [v] #840,115
Damn, I just bought a shit ton of stock. Waste of money.
Anonymous B replied with this 8 years ago, 13 minutes later, 7 hours after the original post[^] [v] #840,117
@840,112 (Washing-Up Liquid™ !jKwXp9RUNE)
> being this obsessed with thinking others are obsessed with you.
> being this obsessed with thinking others are obsessed with you.