We start off with a look at some of the top stories that came out of A&D Strategies and Opportunities Conference in Dallas this past week. Buyers are rushing to non-Permian, non-Scoop/Stack plays. That’s what Geoff Roberts, BMO Capital Markets Managing Director and head of U.S. A&D told the conference during the “following the money” roundtable. Roberts said “Permian is still king, but people are encountering severe competition and the supply of available land is inadequate and there’s a lot of money looking to be spent.” Where are they switching focus to? He says, it’s the Rockies.
Even at today’s low commodity prices “we will see production growth” with crude prices at 60 bbl/d and natural gas at 2.85/MCF for the foreseeable future. Those were the predictions of Maria Sanchez, Manager of Energy Analysis for drilling info in her presentation to A&D Strategies and Opportunities conference. The economics of U.S. production continue to support higher supply, and even a slight improvement in prices translates into significant production gains, Sanchez said. Also, demand is growing, but that growth is at a slower rate than that of production.
And finally, a Financial Times report on oilandgasinvestor.com says E&P companies have been able to drill wells faster and squeeze more oil out of them by targeting the right rocks more precisely and fracturing them more effectively. The outlook for the industry depends on how far those gains can be sustained and extended. The FT report poses the question, has the U.S. shale drilling revolution peaked. In contrast to that, Total’s CEO told the oil and money conference in London, the U.S. shale industry will see a wave of investment. Analysts at the conference, said activity among small and mid-sized producers is ahead of last year’s pace.
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