This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Offshore Drilling: Look, Before You Go Deep

Still, there's so much interest being mucked up for offshore energy as an investment in the past 48 hours, the example of Mukluk Island, Alaska, might be worthwhile to remember also.

Everyone within the energy industry knows about Mukluk's ill-fated history. Should you know about it too?

Mukluk Island is located in the Beaufort Sea area that the Obama Administration has put under drilling consideration for the 2012-2017 offshore drilling plan. In 1984, optimistic preliminary analyses indicating the possibility of a major discovery led oil companies to collectively invest $1.5 billion in federal leases on the Mukluk area exploration.

A test well drilled nearly 10,000 feet through the sea's floor brought up salt water with only traces of oil -- it had all leaked away to other areas of the sea before the drill was active. Mukluk is today an abandoned site. Companies like Dallas-based Diamond Shamrock wrote off close to $200 million on the big Mukluk disappointment.

One oil industry executive told TheStreet on Thursday, "Mukluk was going to be a sure thing, and now it's called a billion dollar dry hole."

Of course, energy optimists say that drilling technology has gotten much better since the murky Mukluk days. The oil industry executive said, "Mukluk was hugely expensive, and drilled with the best available technology of the time. Everything was perfect, and we knew exactly where the oil was, except the oil had leaked out. Technology has improved, but you still have to drill," the energy executive said.

For investors, there are plenty more layers to drill through before going deep into your own personal investment portfolio Mukluk-equivalent.

For everything you ever wanted to know about U.S. offshore oil and gas resources and leasing, but never knew to ask before Wednesday, the U.S. Department of the Interior's Minerals Management Service web site (http://www.mms.gov/) is a good place to start.

-- Reported by Eric Rosenbaum in New York.

RELATED STORIES:



>>See our new stock quote page.

Follow TheStreet.com on Twitter and become a fan on Facebook.
Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
4 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
DO $22.30 -0.04%
ESV $16.66 0.18%
HERO $0.10 -6.30%
RIG $13.42 -3.80%
VTG $0.14 -0.68%

Markets

Chart of I:DJI
DOW 17,711.64 -34.34 -0.19%
S&P 500 2,107.24 -1.39 -0.07%
NASDAQ 5,135.9270 +7.1420 0.14%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs