502 



Mr. D' Amours. What is that level? In the Georges Bank area we 

 are down to 57 million barrels — would you still would you go if it 

 were 27 million? At what point would you say it is not worth it? 



Mr. Ayers. It is going to be this. When your company — you make 

 your estimate. You are not going to worry about anybody else. You 

 will use whatever data you can. You are going to make your esti- 

 mate, figure how much it is going to cost to build a platform, how 

 much it is going to cost to build pipelines or tanker or whatever, 

 and you are going to project crude oil prices. 



You are going to do all this, and then you will come up with 

 some situation. You are going to make a decision about whether 

 you are going to go or not. There is an awful lot of factors that go 

 into that. Every company has slightly different investment 



Mr. D' Amours. The DOI now estimates that there are about 57 

 million barrels on Georges Bank. At what point would the indus- 

 try, if it agreed with the figures, decide not to explore? 



Mr. Ayers. I cannot give you a number like that. 



Mr. D'Amours. Why not? 



Mr. Ayers. Because there are so many factors that go into that. 



Mr. D'Amours. Would you do it for one barrel of oil? 



Mr. Ayers. Of course not. There is a limit, you are right. 



Mr. D'Amours. Can you give me some idea? 



Mr. Ayers. I just cannot tell you what it would be. Georges Bank 

 is a pretty expensive place to produce oil and gas. 



Mr. D'Amours. Would you go in for a million barrels? 



Mr. Ayers. It depends on where it is. 



Mr. D'Amours. You might go in for a million barrels in the 

 Georges Bank? 



Mr. Ayers. I couldn't tell you that. You are asking me things 

 that depend on a whole lot of difficult economic factors, that are all 

 weighed together before an operator will decide to take that 

 chance. 



Mr. D'Amours. Surely there must be some parameters where it 

 no longer becomes even attractive, where you can say clearly below 

 2 million barrels you would not even think of it, or 10 million bar- 

 rels. Isn't there some such figure? 



Mr. Ayers. I cannot give you a figure. I can tell you there is a 

 cutoff point. But I don't know what it is. It is an extremely com- 

 plex number to come up with. 



Mr. D'Amours. Nobody has ever come up with that? 



Mr. Ayers. They come up with it for every case. 



Mr. D'Amours. Give me an idea of a few cases. What has it been 

 in a few cases? 



Mr. Ayers. I can't give you those numbers, because I don't work 

 in that area. It is going to vary. You have a crude oil price projec- 

 tion. Look how that has changed in the last few years. Three years 

 ago people were looking for crude oil prices to go through the roof. 

 Now they are not. It is a cyclical kind of thing. It is complex. But 

 there is a point in time when you are going to make your bid that 

 you will know, you will have an idea in your own mind how much 

 to bid on that lease and everything. It is all based on these kinds of 

 numbers. 



Mr. D'Amours. I am kicking a dead horse and I will stop. 



