Jordan Blum, editorial director, Hart Energy: We are here at SUPER DUG in Fort Worth, Texas. I'm joined by J. Marshall Adkins, the senior managing director and head of energy investment banking with Raymond James, thank you so much for joining us and giving [us] the macro-outlook. I know it's mostly an oil conference here, but I wanted to get your take on the natural gas pricing story. Obviously, prices are pretty woeful right now, but what do you see happening in maybe the not-so-distant future?

J. Marshall Adkins, senior managing director and head of energy investment banking, Raymond James: There's not so much separation anymore between oil and gas because everyone produces gas for the oil. Gas is going to be really challenged this year until you really ramp up the LNG, which starts about now, and over the next 18 months there's going to be about 4 Bcf/d, which is about a 4% increase in related demand for gas by the end of 2025. So that's a big delta from what we've seen in the last year or so on LNG outtake, and I think that's going to start to move the needle.

The other key thing that I think the market is really not focused on as much on gas, but should be, and they're starting to be, is the impact from power related demand. We've done a huge deep dive on AI and chip demand, chip consumption and the electrification of everything, and we think that's probably a minimum of 2 Bcf/d of additional gas demand on top of the LNG. When you start to add that up and marry it with the fact the gas rig counts are down 40 something percent, it's like, ‘Oh wow. This starts to get to be a good story as we move through 2025 and into 2026.’

JB: Very good. So yeah, it's not a bad business model. You use the AI to get better oil and gas more efficiently and it drives up natural gas demand through the power demand.

JMA: Exactly. The interesting thing about the whole push to renewables, that obviously is being funded largely by the government, is that it naturally puts coal out of business because the more solar you build, the worse prices for electricity you'll be in the middle of the day. In fact, solar is going to be pumping electricity in the grid. Will prices go negative in many parts of the country during the day because of solar? A coal plant can't turn off, so it's going to force them [solar companies] out of business over the next decade and all right, well ‘What do you fill the gap with?’ You still need reliable power. Well, that's gas because we can crank [it] up and down.

JB: I assume you see the crude oil story as a bit more stable and consistent.

JMA: Yeah, there's no question. Crude demand has a misperception that demand is coming to an end and EVs (electric vehicles) and that's kind of getting blown up now with the whole EV story, and I think people are going to understand that crude demand globally is going to keep growing for our lifetime. So prices will crimp it from time to time, but we're nowhere near that price right now. Prices need to probably double from where they are right now to really start to ease into that demand growth rate and the future strip says just the opposite. It says we go from $80 down to sub $65 over the next five years. I'm like, ‘that doesn't make sense to me,’ because if demand is growing and supply growth is limited, which it will be at today's prices, then you have set up a pretty good backdrop for crude out for the next five years. I happen to think, depending on what Saudi Arabia does on increasing production, or not, in the next few months. If they don't increase production, I think we could really get a move in the back half of this year up towards $100, which in inflation adjusted terms is not a huge deal. I mean, it's still way below where we were even 2011, 2012, 2013 and 2014, but for energy producers it's a huge deal going from $70 to $100.

JB: I wanted to get your take on how this wave of M&A and consolidation fits into the equation with fewer operators and maybe more conservative drilling programs.

JMA: Well, I think what you're seeing is across the board. The oil and gas industry is the healthiest I've seen in my career, and I've been a stock analyst for 25 years and a banker for the last five years and was actually in the industry for the prior decade. This is by far the healthiest the industry has ever been. It's actually making money, it's generating great returns and by consolidating, and you heard Kaes Van’t Hof talk about it earlier today. You can now drill four-mile laterals if you have everything blocked up. So it actually allows operators in the industry to operate more efficiently, to lower their costs and deliver more production at a low cost and generate real returns for investors, which so far the market seems to be ignoring.

JB: Great. Thanks again so much for joining us here at SUPER DUG. I really appreciate it. To read and watch more, please visit online at