AJM Petroleum Consultants

AJM Petroleum Consultants

October 06, 2008 23:59 ET

Fundamentals, Not Financial Turmoil, Drives Long Term Prices

AJM Releases Fourth Quarter Oil and Gas Price Forecast

CALGARY, ALBERTA--(Marketwire - Oct. 6, 2008) - AJM Petroleum Consultants released a fourth quarter price forecast for oil and gas that predicts a decrease in prices over the next three years, but holds long-term forecast prices at the same rate as predicted last quarter. In his forecast commentary, AJM economist and Vice President of Operations, Ralph Glass, cautioned against weighing the current turmoil in the financial markets too heavily against long-term price trends.

"If the US goes deeper into debt and recession, the value of the US dollar will drop and the price of crude oil will increase - this is why AJM is predicting oil prices at $100.00/bbl in the longer term," stated Mr. Glass. "Our short-term price drop reflects the fact that global economic concern appears to be causing a reduction in demand, especially in the US. It also reflects the ripple effect the economic turmoil in the US is causing throughout the world: as Europe experiences a credit crunch, the EURO is dropping against the US dollar, causing a corresponding drop in the crude oil price. And as oil goes, so does gas."

Mr. Glass believes that despite all the current turmoil, the basic fundamentals of an increasing worldwide demand, a declining production capability, and the lack of a cost effective alternative energy source are still the drivers that will keep the oil and gas prices high.

AJM's Q4 2008 price forecast, established effective September 30, 2008, shows crude oil prices in constant dollars based on a WTI forecast of US $100.00/bbl for the last quarter of 2008, $108.00/bbl for 2009, declining to $104.00/bbl in 2015. The AECO natural gas price in constant dollars is expected to average $7.35/Mcf for the last quarter of 2008, $8.70/Mcf in 2009, $8.40/Mcf in 2010 and $9.00/Mcf in 2011.

Complete forecast tables, commentary and documentation for AJM's September 30 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. Over time, the company's price forecasts have proved to be more realistic than others in the industry.

Contact Information

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