Monday, January 11, 2010

Its a gusher! (in the Gulf of Mexico for McMoRan)

What a nice move today for MMR after they reportedly struck oil in the Gulf. According to the release, they discovered oil just off the coast of Louisiana in "approximately 20 feet of water." The interesting part is that the actual oil deposit was ultra deep, they "drilled to a measured depth of 28,263 feet." That's over five miles deep! Turns out this is one of the largest discoveries in the Gulf in decades which is probably due to how deep the oil is. Perhaps we have a lot more domestic crude than previously thought, just super deep. I wouldn't chase MMR here but its a nice looking chart and far below its all time highs. Oil people please chime in on this.


matscom said...

That was a deep thrust.....How good is the find? What's the environmental impact?How important is 'oil' to our future?

pythagoruz said...

Yeah, i wasn't aware that we were digging that deep or that we would expect to find oil there. I mean, how old is that organic material? Billions of years? I'd guess this material is related to the Mississippi delta fertility over time.

"How good is the find?"

I'm really no expert this so I couldn't say. I do know that now a days the game is about replenishing oil reserves for the big oil companies. In order to grow for their shareholders they must at least replenish produced oil in reserves, and hopefully add. As the scale of companies like exxon and chevron have grown they have to rely on means besides exploration to replenish reserves. So if this find means SEC approved reportable reserves then MMR could become a takeover target.

"What's the environmental impact?"

No idea on that one.

"How important is 'oil' to our future?"

I would guess that oil will remain as important for our future as it has been for our past: extremely.