HOUSTON—For the first time in two long years, the oil and gas industry has apparently regained its mojo: in tone, swagger and genuine optimism, the annual Nape Summit was back to form.
With attendance of 12,299, Houston’s grand oil and gas show was bigger in 2018, drawing nearly 1,100 more people than last year’s exposition. Crowds swarmed an exhibition hall packed with E&Ps, financers and service companies.
Exhibitors held court in spruced-up booths. Neatly stacked prospect sheets and maps were deployed and the usual tradeshow trinkets—footballs, flash drives and personal manicure sets—were for the taking.
But the key for an exhibition that prides itself on being “where deals happen” was that transactions were indeed done.
Joseph A. Mills, president and CEO of Samson Resources II, led off the summit’s global business conference by recounting the company’s slide into bankruptcy and its rapid recovery.
Not every E&P suffered to the same degree—or rebounded as successfully—as Samson. But in the abstract, Mills summed up the shared experience of a crowd challenged by the two-year slump in commodity prices.
“We are really glad to be back, really from the dead,” he said.
Front and center on the exhibition floor at the George R. Brown Convention Center, Chris Atherton, president of EnergyNet, had the cat bird’s seat. EnergyNet, which markets oil and gas properties of all sizes, secured the prominent spot not merely to enhance its profile, but for tactical purposes, too.
“We really have a reason to call on ExxonMobil. We have a reason to call on a granny out in the Midland who has some royalty interest she may want to sell,” he said. “We think it’s valuable to have a big presence and be seen and get as much exposure as we can.”
In several cases, the strategy paid off.
“We actually got deals done here on the floor, with deals that we were already marketing, that were consummated, an agreement was made right here,” he said.
At the opposite end of the hall, Wise Oil & Gas Ltd. was just as happy with the notice it received. In quiet conversations, visitors stopped to eye the company’s displayed property maps.
Wise, which owns properties that it leases, started exhibiting about 10 years ago when no other landowners attended NAPE, said Jamie Downing, the company’s general counsel. Over the years, Wise has leased to companies such as ConocoPhillips (NYSE: COP) and Devon Energy Corp. (NYSE: DVN).
“It was one way for us to get some visibility without having to hire someone,” she said. “We just negotiate everything ourselves.”
In much the same way, about two dozen oil and gas companies capitalized on NAPE, which held its first job fair on Feb. 7 to coincide with NAPE’s business conference. Jobseekers including geologists, engineers and landmen packed into a room that seemed a half-size too small. They were greeted by chatty talent scouts handing out company baubles and taking up résumés.
The business conference attracted its typical all-star roster. Presenters and panelists include executives from Chevron Corp. (NYSE: CVX), BHP Billiton Ltd. (NYSE: BHP), Anadarko Petroleum Corp. (NYSE: APC) and Chesapeake Energy Corp. (NYSE: CHK).
Mills led off the business conference with an analysis of Samson’s restructuring efforts. The company’s journey was like many of the more than 130 E&Ps that sought bankruptcy protection following the 2015 downturn.
Samson, once the biggest private oil and gas company in the U.S., was among the largest companies to fall into insolvency. In 2011, the company sold for $7.2 billion. By 2015, the company threw in the towel after a 12-month stretch in which net losses snowballed to $1.9 billion.
In March, the company emerged from restructuring. Within eight months Samson paid off its debt and finished 2017 with more than $100 million in cash, following the divestiture of its East Texas position for $525 million.
Samson has scaled back from what was once a 2-million net acre empire and is now focused on developing roughly 200,000 net acres in the Powder River and Green River basins.
As Samson describes itself, it’s now a startup “with 40 years of history.”
Drawing on similar themes, Chesapeake President and CEO Doug Lawler retraced his efforts to shift the company’s sarsen of debt—before the downturn even took hold.
Roughly five years into Lawler’s leadership, Chesapeake remains fixed on cutting away more debt—up to another $3 billion “as soon and as quickly as we can.”
“But in a low-price environment, we’re not going to just liquidate our assets. It needs to be accretive,” he told NAPE attendees.
As NAPE drew a close on the exhibition floor Feb. 9, Matthew Idiens, CEO of Rose Petroleum, was ready for the trip back home on a long flight to London.
Idiens leads a U.K.-based company with about 90,000 acres in Utah’s Paradox Basin. His exhibit hoped to tempt a few farm-ins.
“The one good thing about NAPE is deals generally happen here. You can’t say that at many exhibitions,” he said.
Idiens said 2018 was his first year to exhibit at NAPE, adding he had previously attended the exposition twice.
“This year has by far been the best year,” he said.
For this year, even among the most grizzled and weary NAPE veterans, few would have bothered to argue the point.
Darren Barbee can be reached at email@example.com.
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