These quotes are for shipping a US based logging unit to belize to log the well & is a reasonable price considering the risk involved with driving through Mexico and the lost work that the logging unit would loose during transit to & from belize. TECO does not offer an explanation as to why they didn't ask BNE what they would charge to rent their logging equipment, which is certainly in Belize & wouldn't require nearly the capital commitment of buying their own logging unit.
Buying a logging unit did have an upside in that it gives TECO control over what information they will release - it gives them the option to say: oh no, we couldn't get to bottom to log the discovery if in fact there was no discovery. I'm not suggesting that this occurred, but I man suggesting that it could have occurred. Limestone is typically a very stable formation, not prone to sloughing or erosion or chemical interactions with the drilling fluid.
However, buying such equipment is not always in the benefit of E&P companies or else companies like Shell, Chevron, Exxon, etc. would own their own rigs, which they do not. In fact, TECO is the only operator that I have ever heard of that owns their on drilling equipment & associated equipment.
Right now TECO has 3 to 4 work-over rigs (they call them drilling rigs) that are stacked & generating rust rather than revenue; despite a present demand for work-over rigs & supporting equipment all over the united states. Right now TECO does not have experienced personnel to operate this equipment nor to they have the business infrastructure to support or market contractor work. This is why E&P companies rarely burden themselves by taking on such assets, and generally invest their capital in ways that offer higher rates of return.
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My advice for TECO would be to spend their capital not buying used work-over rigs, but collecting leases in one of the many new 'resource plays' that are transforming the US energy supply. These plays have a success rate of 100% once completion techniques are understood, unlike traditional wildcat drilling like TECO endeavors in which offers a success rate of 7%. Resource plays, with the technology that they utilize, make it possible for companies like TECO who lack management with oilfield experience or technical knowledge to succeed alongside industry veterans.
My advise for TECO shareholders would be to find a company who follows the strategy mentioned in the previous paragraph, and develop a prudent exit strategy to get their capital out of TECO.
TECO's Texas drilling operations will lead TECO Longs to nothing but disappointment. However, just like they did in Belize, TECO will announce a huge discovery even if they drill a dry-hole.
Recent post made on this board has made it obvious to me what occurred while TECO was drilling their 2nd well in Belize. They drilled to 1,200 ft or whatever their total depth was & their rig &/or mud pumps broke down. Rather than inform shareholders of yet another setback, TECO chose to announce that they had made a huge discovery. They knew that they could get away with such a lie because the falsehood would never be proven otherwise, and if it was then they would just claim that they were ignorant as to what justified a huge discovery. It is clear that TECO didn't expect the Government of Belize to renounce their discovery & mandate wireline logging. TECO then found a way to maneuver around this trap by procuring their own logging equipment & claiming that they couldn't reach bottom, even if that meant that they had to drop a few joints of drill-pipe down into the hole.
It would be more difficult for TECO to get away with such activities in TX, with the RRC & the SEC being so much closer, but I actually think that these guys will try it... This announcement may present a nice exit strategy for those who are starting to doubt the existence of TECO's ethics department...
Please note: all contents of this post are based on personal opinions and I offer no proof to support my conclusions.
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