2014 NAPE Denver comes to a close today after the better part of three days of meetings, dinners, parties, exhibits and trips around the exhibit hall. From my perspective, the event was well attended and enthusiasm was high, but invariably conversations led to the pink elephant in the room – the precipitous fall in oil prices.
As I write this, WTI crude is sitting below $58 a barrel, and Yahoo! Finance has an article where Bill Richardson predicts $45 oil Lawmakers and policy analysts are already looking at an industry slowdown and its effects on local economies, with Houston perhaps being the one most likely to be affected. In addition, service sector companies are seeing dramatic effects on their business from the impending slowdown.
With all this bad news, here are my takeaways from NAPE:
- People, smart, experienced professionals, are nervous and don't know where the bottom is;
- The overwhelming majority of people don't foresee a rapid
price recovery;
- Good operators, with efficient production techniques will survive; poor operators will perish;
- No one is sure if an M&A frenzy is on the horizon;
- If gas prices remain consistently close to where they stand today, people can make money on gas; and
- There is a lot of money out there needing to be spent and gas might be the preferred investment for much of that money.
But the most consistent comment and the most important message – been there, done that. The industry has been through good and bad times, and it will ride out this bump in the road too.
Personally, I'm hoping NAPE Denver 2015 is dominated by discussions of resurgent prices and deals to be made.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
