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San Juan Basin Royalty Trust Message Board

  • pdxgaye pdxgaye Mar 19, 2001 8:46 PM Flag

    Capital Expense Announcement

    What the thot of this ???

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    • In all business, and even to a greater extent, in this business, capital expendatures increase with product demand/price rise. Wells will continue to decline in output during their life but with reworking and new drilling, total production can be maintained or even increased somewhat. If the price of the product falls, then the output will fall, as no capital will be invested to improve the output. If the price rises, as it will if supply starts to fall, then the cash will be put into the rework etc.
      That said, the price is high, and going to remain high so expect capital outlay to continue high. We should like it that way, as it will put more money in our pocket over the long haul.
      Good health and fortune to all.

    • It means they have to spend more money to maintain production.

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