The Associated Press

BATON ROUGE - Although the Gulf of Mexico's best days for oil and natural gas drilling are in the past, huge gas reserves remain untapped, an analyst says.

But getting to those reserves will be more difficult and more expensive than conventional drilling, said William Walker, president of the New Orleans-based investment research and banking firm Howard, Weil, Labouisse, Friedrichs Inc.

Walker told a conference of energy executives Monday that some exploration companies will continue to be successful with offshore drilling. But with conventional methods, "the best days of the Gulf of Mexico are behind us; they're not in front of us."

Since the late 1940s, more than 46,000 oil and gas wells have been drilled in the shallow waters of the gulf. In the past several years, drilling activity has slowed dramatically as discoveries and profits have tapered off, he said.

Domestic activity also has given way to energy companies' growing investments in the Mideast, Russia, Africa and other areas with huge, untapped reserves.

Walker said unconventional exploration and production, especially with deep-shelf drilling, could be the state's big opportunity. Deep-shelf deposits are found in less than 200 meters of water, but the deposit can be miles below the gulf floor.

Deep-shelf exploration is expensive because of the danger and the technology needed to find them, he said. Those types of deposits each could hold on average about 20 billion cubic feet of gas.

Walker also said consumers could see some relief from recent high gas prices. By early next year, prices could drop to about $4.50 per thousand cubic feet after averaging about $5.60 through the first nine months of 2003, he said.

Walker said that the nation's gas suppliers are reporting adequate storage for winter use patterns and that weather forecasters are predicting winter will be milder than usual.