AJM Petroleum Consultants

AJM Petroleum Consultants

November 05, 2008 23:59 ET

Commodity Prices Decreased in Short-Term Forecast

AJM Petroleum Consultants Issues Revised Fourth Quarter Oil and Gas Price Forecast

CALGARY, ALBERTA--(Marketwire - Nov. 5, 2008) - AJM Petroleum Consultants has revised their fourth quarter oil and gas price forecast previously issued on September 30, 2008. AJM's new forecast for the balance of 2008 features significant short-term adjustments for crude oil prices, with the WTI forecast price, in constant dollars, dropping to US $75.00/bbl for the remainder of 2008, down from the previously forecast $100.00/bbl. The oil price will lift slightly to $85.00/bbl for 2009, which is also down from the previously forecast $108.00/bbl. AJM is predicting crude oil prices will rise over the longer term returning to previously forecast highs of $100.00/bbl by 2013.

"While our revised forecast is now less positive in the short-term than our previous one, we are still anticipating higher oil prices in the longer-term," said Ralph Glass, AJM economist and VP Operations. "AJM is of the opinion that we saw the bottom for hydrocarbon prices in October. We anticipate prices will move into a slow recovery, dependent of course on the world recession and the time it takes to come out of that recession."

AJM points to several key contributing factors that will drive a longer-term increase in oil prices. As examples, the company cites OPEC's attempts to cut production, continued growth in demand from China and India, as well as a potential reduction in the replacement of oil and gas production due to declining investment in new crude oil projects.

The revised AJM forecast sees only marginal revisions to the natural gas prices predicted in the September forecast. The NYMEX price was decreased $0.50/Mcf to $7.50/Mcf for the balance of 2008, and the 2009 estimated price was decreased $0.15/Mcf to $8.10/Mcf. For 2010 the estimated price has been adjusted to $8.60/Mcf, a decrease of $0.40/Mcf. AJM anticipates the NYMEX price will return to the levels predicted in our September 30, 2008 forecast by 2013 when it will reach $9.50/Mcf.

"The global meltdown that we've seen over the last month has dramatically changed the landscape of the commodity pricing world," said Glass. "The confluence of world events lead AJM to revise our September 30, 2008 price forecast, enabling our clients to continue to rely on us for realistic value evaluations."

Complete forecast tables, commentary and documentation for AJM's October 31, 2008 price forecast are available for download on the AJM Petroleum Consultants website at www.ajmpetroleumconsultants.com.

AJM Petroleum Consultants, a privately owned Calgary-based company, has extensive experience in corporate reserve evaluations, acquisition and divestiture evaluations, and evaluations of unconventional reserves such as coal bed methane, tight gas, shale gas and bitumen/heavy oil. Diverse engineering and geological capabilities combined with a forward thinking approach to technology have allowed AJM to provide innovative solutions to clients in the upstream sector of the oil and gas industry in Western Canada, North America and internationally.

Contact Information

  • AJM Petroleum Consultants
    Andrea Conway
    (403) 648-3269 or Cell: (403) 561-8620