Oil & Gas Industry Focused on Innovation - Deloitte Oil & Gas Conference

Deloitte - Technically Recoverable Tight Oil
Deloitte - Technically Recoverable Tight Oil

Several key leaders from across the industry shared their optimism at the annual Deloitte Oil & Gas Conference on November 16th.

The conference agenda covers the global oil & gas industry, but US shale plays dominated the conference. Many of the speakers reiterated that we're no longer in a "shale revolution", but a renaissance that will last for years to come.

The industry is focused on innovation. New technologies are needed to address challenges presented in shale development. Whether it is lowering operating costs or utilizing currently flared gas through a gas-to-liquids (GTL) process, the industry sees room for growth.

A few key points and statistics we noted while at the conference:

  • Oil production has grown to 1980s levels
  • 15% of technically recoverable shale gas and 17% of technically recoverable shale oil resources globally are located in the US
  • The US will pass Russia as leading O&G producer this year; will pass Saudi Arabia next year
  • Shale has increased our current trade balance by $200 million/yr and is predicted to give us oil independence by 2020
  • US has increasing geopolitical influence in critical regions due to growing oil & gas production
  • The oil export ban needs reform. Otherwise, refinery changes are needed and we will consume more expensive crude.
  • Operators are focused on cutting costs to increase valuations
  • According to Maynard Holt, "we may be in the 8th inning of the shale game, but we're in the 3rd inning of the completion/cocktail game"
  • Since 2008, foreign firms have invested over $100 billion in US unconventional assets
  • Over that period, Chinese companies have spent $44 billion to acquire N. America based energy firms and assets
  • Gas-to-liquids technology is becoming more and more attractive with current oil and gas prices
  • Skip Horvath, Natural Gas Supply Association predicts that natural gas will hit $6.00 by 2020, "assuming Washington leaves us alone over the next few years."

"This boom isn't just for a few years. We believe the shale revolution really has staying power" -Ryan Lance, ConocoPhillips CEO

About the Deloitte Oil & Gas Conference

The Deloitte Oil & Gas Conference is an annual conference for oil and gas executives and leading industry experts to share their views on important issues facing the global oil and gas industry. The objective of this conference is to provide a forum for executives and managers from companies in all sectors of the oil and gas industry, commercial and investment bankers, industry analysts, service providers to the oil and gas industry, representatives of government agencies, trade groups and policy planners, to understand emerging issues.

Opportunities in the Bakken - Houston Event

Houston Skyline
Houston Skyline

If you're located in Texas, there's a Bakken Event on February 21st at the Sheraton. Speakers will address the why, how, and the future of North Dakota. You'll learn why the state has the lowest unemployment rate in the US and hear more about business opportunities in the region.

The lineup of speakers includes reps from the several companies active in the Bakken.


Notes From Winter NAPE 2013

Geologist Wanted Ad
Geologist Wanted Ad

We spent Winter NAPE (February 6-8 in Houston) listening to the pros discussing their views on energy policy, fundamentals, and investments. The event is centered on North American, but international influence seems to grow each year. A few photos are included below the post. 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.