More than 10,000 people attended the NAPE Summit at the George R. Brown Convention Center this week.
When the exhibit floor opened Thursday morning in George R. Brown Convention Center, landmen – which represent the majority of attendees – were much happier than a year ago. After two years of low energy prices, the faithful gathered again to buy and sell land and drilling rights, scout prospects and make connections in hopes of finding the next big deal.
This year’s 700 exhibitors included an array of domestic, international, and offshore companies. In addition, two individual domestic and international theaters each ran a full day of prospect previews.
The conference opened almost a year to the day after oil prices slid to a 13-year low of $26.21 a barrel on February 11, 2016. Nothing cures an energy downturn like rising oil prices.
“We certainly think the days of really, really bad prices, in the $30s and low $40s, are behind us,” said Robert Clarke, a research director at energy research firm Wood Mackenzie.
Sponsors were back and larger production companies, like Sanchez Oil & Gas of Houston, and Excalibur Resources of Dallas, were spending again, dishing out $10,000 or more on booths and other promotional activities.
“The atmosphere has been a night and day difference,” said William Knebusch, Vice President of Geology for Excalibur Resources, LLC. “NAPE Summit has been a very successful show for us.”
West Texas’ Permian Basin appeared, again as the star of the show. Bryan Sheffield, chief executive of Austin-based Parsley Energy, said conditions in the Permian feel like 2011, when shale drilling was revolutionizing American oil production. Parsley has spent nearly $3.5 billion already this year on Permian acquisitions.
Eight other U.S. plays, from North Dakota to Colorado to Pennsylvania, are set to receive more investment this year than last, according to Wood Mackenzie. Over the past month, U.S. companies have added 82 rigs in the patch, the largest addition in one month since early 2011, Clarke said. The SCOOP and STACK in Oklahoma added 17 rigs; South Texas’ Eagle Ford grew by 11; East Texas’ Haynesville added five.
Viking Minerals, an Oklahoma City firm owned and operated by Ran Oliver and Court Roueche, experienced its first year as a NAPE exhibitor. Active in the Eagle Ford, Permian, and Mid-Con, Ran said, “We felt the same energy and optimism as the rest of the attendees. The mood and atmosphere was overwhelmingly positive on the floor. We were able to get our name out there and create some new relationships that will hopefully benefit us, and our new friends, in the near future.”
Viking Minerals is currently in the process of raising capital for its next iteration. “We were pleasantly surprised at the volume of attendees and exhibitors interested in our company. Small operators, major international oil companies, and capital providers of varying sizes expressed interest in Viking’s future plans. We’re excited to move forward with our new relationships and make sure we capitalize on a great couple of days at NAPE,” said Ran.
Software and technology were a big part of the show this year as various companies were on-hand showing off the latest developments in land, data and analytics. One such company, Oseberg, an Oklahoma City-based software company led by Evan Anderson, CEO and co-founder, is comprised of a dynamic team of industry experts who are developing cutting-edge data and B2B SaaS products for the industry.
Evan had the following high-level observations after his visit. “There appears to be an appetite for innovation with respect to data and the products that deliver it to the upstream/midstream industry. I had several conversations with industry leaders that are starting to think differently about how they can leverage data. I believe we’re at the precipice of a major shift with resources increasingly being allocated to technology and data.”
Evan went on to note that “Spotfire seems to have a strong presence on the front-end application side of the business. I spoke to many “data” companies who are relying upon Spotfire dashboards to display their data. I worry that front-end applications will become commoditized. Data and analytical insights, less so.”
2017 is still in the early chapters and the story of recovery in our industry is not yet written. Robert Clarke, the conference’s first speaker and a director at energy research firm, Wood Mackenzie, believes the industry is in recovery mode and that rebound, he said, will be “very aggressive.”
Still, there are consequences to all that growth, Clarke said. Drilling contractors are starting to charge more for their services, which got so low in the crash, many said they weren’t making money. Now Wood Mac is hearing stories of day rates rising by 20 to 30 percent.
Let’s hope for a continuation of stable oil and gas prices paired with a modest increase in charges by service companies and that the 2017 story will be one of true recovery.
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Compiled and Published by GIB KNIGHT
Gib Knight is a private oil and gas investor and consultant, providing clients advanced analytics and building innovative visual business intelligence solutions to visualize the results, across a broad spectrum of regulatory filings and production data in Oklahoma and Texas. He is the founder of OklahomaMinerals.com, an online resource designed for mineral owners in Oklahoma. ☞Email:firstname.lastname@example.org