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Enron Mail |
Attached is the CERA report entitled "Drilling Activity Downturn Means Tighter Gas Supply".
A short synopsis: FALLING GAS PRICES TRIGGER ACTIVE RIG COUNT DECLINE The economic downturn, lower industrial demand, moderate weather, and falling gas prices have combined to hit gas-directed drilling activity hard. Gas prices briefly fell below $2.00 per MMBtu in October. From a midsummer peak of 1,068 gas-directed rigs, the US industry active rig count plummeted to 834 by November 9 and could fall as low as 700-750. Producers' drilling plans for the 2002 budget year are already being curtailed. * The drilling downturn could mean as many as 8,000 fewer gas wells in the United States over the next 12 months and 1.5 to 2.0 billion cubic feet per day of lost production. * The majority of the activity reduction is onshore, but the significant drop in Gulf of Mexico shallow shelf drilling will have a huge impact on productive capacity. * Gas supply could be extremely tight once again next year just as the economy recovers, and gas demand is expected to rebound with it.
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