| From the President’s
Desk I have been
reflecting back on the domestic oil and gas industry drilling
activity of the 2003 year, or perhaps I should say the "lack of
activity"
and wondering what direction will be taken in the upcoming 2004 year.
A colleague and fellow AADE board member questioned one year ago "why
aren't
we drilling"? Speculation then was diverse and ranged from the industry
is
suffering from a lack of quality prospects, from fall out of the Enron
debacle, from economic weakness, from the uncertainty of the pending
Iraqi
war, etc.
So, after a year of strong commodity prices, lack of reserve
replacement,
and less than optimum commodity inventories the same question remains,
"why
aren't we drilling"?
Perhaps the industry is still being scrutinized by the politicians and
Wall
Street in this post Enron era but that too seems to have faded somewhat.
Furthermore, oil production from Iraq will not be flooding into the
market
anytime soon and the United States economy seems to be firmly
rebounding.
Admittedly it is more difficult to generate good prospects today but
still,
good ones are being found and presented. All of this seems to point to
the
fact that we should be in the mist of strong domestic drilling activity.
I willingly confess that I do not have the answer but I like many
others,
know that this inactivity cannot continue much longer. The national
security and economic consequences are much too severe.
We all know that it is characteristic of the good people in the drilling
business to be cautious and to view forecast activity with suspicion.
Perhaps this is the reason for the gloomy spirits we are experiencing
today.
But maybe this will change soon. After all we are quickly approaching a
bright new year and all of the industry fundamentals indicate we should
be
experiencing strong drilling activity. Hopefully that is what 2004 will
bring for us.
Whatever happens, I wish a happy winter holiday season and a prosperous
New Year to all.
Your President,
Andy Ellis |
