I recently attended NAPE in Houston, Texas - this is a huge oil and gas expo with over 12,000 attendees. I made some observations that I thought may be worth sharing.
First of all, there were a notable amount of conventional prospects for sale. These are usually small, vertical, affordable and easy-to-drill conventional oil prospects. It seems as though the crazy growth in unconventionals (horizontal drilling that targets the source of the petroleum accumulation) is starting to slow. The Permian Basin is the exception. Perhaps this slow down is due to faster-than-predicted decline curves and production performances that turned out lower than expected.
Second, folks seemed keen on buying assets that are already producing, cash-flow positive and have in-field development opportunities. This basically means investors are taking a more conservative approach because the wells have already been drilled (eliminating engineering and geologic risk) and now they have a predicted production decline curve.
Third, there was some excitement about non oil and gas assets and ESG investing (Environmental, Social and Governance) - which measures the sustainability and societal impact of an investment. Multiple people talked to me about helium exploration in the Four Corners area. Many of the large companies are diversifying to include renewable energy as part of their energy portfolio, and are in support of the Paris Agreement’s goal of limiting warming of the planet by less than 2 degrees Celsius (Shell, BP, Equinor, to name a few).
What are your thoughts on NAPE 2020? Leave a comment!