Shopping for Good Deals

March 3, 2015 Elizabeth Alford

At the recent NAPE Summit in Houston, people from all sectors of the energy industry came together at a unique event for three days of networking, education and deal-making.

Certainly, the challenges of low oil prices were on everyone's mind. But if people were worried, the thousands in attendance did not give it away. The arena was filled with bankers, investors and drilling companies looking to talk business and shopping for good deals.

Related: NAPE Energy Summit 2015

NPR was on site at NAPE and talking to attendees about their perspectives and concerns. Kenny DuBose, mineral investor and shale oil publisher, sat down with John Ydstie and commented on his experience.

Mr. DuBose's comments were similar to others heard throughout the conference, as industry leaders and company owners expressed optimism about the future.

Access full interview at NPR.com

NAPE Energy Summit 2015

February 16, 2015 Elizabeth Alford

Last week, nearly 15,000 participants descended on Houston for the 2015 NAPE Summit, featuring international and business conferences as well as over 850 exhibitors. This annual networking event brings prospects, producers and purchasers together to forge important business connections and hear industry thought leaders.

If low oil prices are a predictor of where the industry is headed, you couldn’t tell by the packed convention hall and the atmosphere of optimism. Keynote speakers including Jack Stark, President and COO of Continental Resources, focused on the record production set by North American producers in the last five years. He listed some of the industry’s recent wins:

Unprecedented growth from 2005-2015
World changing upstream technologies
Discovering a whole new, vast class of reservoir (shale plays)
Reserves at all time highs
Created jobs and increased our energy independence
Improved efficiencies such as cutting drilling time from 45 days to 17
A midstream evolution: pipelines, rail, rail to barge and connections to all coasts

The Chief Upstream Strategist for IHS, Bob Fryklund, encouraged participants not to push the panic button too quickly. Fryklund acknowledged that the conversation has changed in recent months but was quick to remind participants of the cyclical nature of the industry and that history indicated we would weather this storm.

“OPEC and others discount the resilience of North America.” He added that, “we will not be a diminished producer because of what we are going through.”

— Bob Fryklund

The Keynote speakers took an optimistic tone, but some attendees expressed more caution. Several, who wished to remain anonymous, shared that they are convinced that a recovery is farther down the road. They expressed concern for their employees and their shareholders and are working to make hard decisions that will see them through the rest of 2015.

For more about NAPE, visit napexpo.com

Winter NAPE Expo Business Conference Highlights - 2014

February 6, 2014 Kirk Eggleston

The NAPE Expo is a North American event with some international influence, which features key players in the oil and gas industry. The business conference theme for 2014 was sustainability in the U.S. oil and gas industry.

The conference touched on key issues such as hydraulic fracking, regulatory and environmental issues, operational procedures and technological innovations.

Hydraulic Fracking and the Issue of Water

Multiple speakers put a spotlight on the practice of hydraulic fracturing, and water sustainability. Here are some of their comments:

Former Secretary of the Interior, Ken Salazar, said, "I believe hydraulic fracking is safe... there is not a single case where fracking has caused an environmental problem for anyone."
David Blackmon, Dir. FTI Consulting, said, "the biggest issue by far facing the industry today is water."
880 Trillion Gallons of brackish water in Texas could potentially be used for development in 2 - 3 years according to Blackmon
"The Eagle Ford doesn't flow back as much water as other areas, and it looks like its going to be at a net water deficit for some time," said Andrew Slaughter, VP, Upstream Research, IHS

Regulations and Environmental Issues

Effective January 1st, new casing and cementing regulations went into effect for all Texas Operators
Texas Rail Road Commissioner, Christi Craddick, to Texas Operators: "we'll be implementing and enforcing flaring rules [in February 2014]." Read more at rrc.tx.state.us
David Blackmon, Dir. FTI Consulting, said, "the Endangered Species Act could potentially have a significant (detrimental) impact on business in [Texas]."

Operational Procedures and Using Technology for Sustainability

Robert Turnham, CEO, Goodrich Petroleum on business strategy: "We move early, identify opportunities and take the risk up-front. If you move early, then you enjoy lower royalty burdens straight off the top."
Apache converting waste gas to electricity for field grid usage
General industry focus on artificial lift technology in shale drilling to quickly drain reservoirs
New diverter technology being utilized to make shale drilling more economic in marginal wells

Other Notable Comments from the Conference

Luke Keller, VP, BP America, said, "[the] U.S. could achieve energy independence by 2035."
"$2000 financial benefit to every American household by 2015 due to unconventional drilling of natural gas," according to Don McClure, VP, Government Stakeholder Relations and Legal, EnCana Oil and Gas USA
"The U.S. has close to 200 - 300 years of hydrocarbon reserves," according to Charles McConnell, Rice University
Industry encouraged to support better outreach and education initiatives via social media outlets

Learn more about NAPE by visiting napeexpo.com

Heard at Winter NAPE 2013

February 11, 2013 R.T. Dukes

Winter NAPE was February 6-8 and we spent our time listening to the pros discussing their views on energy policy, fundamentals, and investments. It's a North American event with some international influence. See photos below. A few highlights from the business conference include:

At one point in 2012, there were 12-13 federal agencies overseeing some point of the E&P business
Alaska is working to create incentives to fuel future exploration. (Only 500 exploration wells have ever been drilled in Alaska. More than 250,000 have been drilled in Texas)
Alaska is working to ensure the federal government can't block development the state is in favor of
Most of those that oppose "Fracking" oppose oil & gas development in general
The industry moving to address all stakeholders. (Not just mineral owners and shareholders)
Asia and the US are set to lead global growth in 2013
Payroll tax hike will reduce growth, but we should still grow
Chemical facilities are expanding for the first time in 50 years ($95 billion in investment planned)
Problems in the US are artificial (man made)
Brent is expected to trend into the low $80s, with WTI differentials shrinking
A Whiting executive believes the Bakken-Three Forks could hold 25-50 billion barrels of recoverable oil
Anadarko is 500 wells into the Eagle Ford and still sees upside (targeting a 4.2 day drilling time)
Schlumberger shared a study showing 30% of perf clusters don't contribute to production

In previous years, the floor of NAPE has had a general theme. One year it would be the Barnett, the next the Haynesville, then the Bakken. This year there wasn't a single area that seemed to dominate the booths. There were small deals across almost all of the shale plays. I saw several Bakken and Eagle Ford deals, as well as conventional projects around the country. From speaking with the attendees, it sounds like conventional drilling has become unconventional in today's market. The largest operators are investing in big, repeatable shale plays.

The North American Prospects Expo (NAPE) is one of the largest oil and gas gatherings in the wold. E&P companies from across the world come to Houston to showcase the next big oil deal.