Stacked plays to lead the list at this week’s NAPE gathering
The buyers and sellers of oil land are getting together this week to cut some deals.
The annual summer NAPE conference, formerly known as the North American Prospect Expo, kicks off Wednesday at the downtown George R. Brown Convention Center. Bernie Ulincy, land operations manager at Houston-based Southwestern Energy and chairman of the expo’s operators committee, took a few moments with me last week to explain the show and pick some highlights. NAPE essentially puts people looking to sell oil land and people looking to buy it in the same room. Attendees are making deals — say, for the mineral rights under a prime piece of Permian Basin real estate — right there on the exhibit floor.
“That’s the main reason you go to the show — to sell what you have, or evaluate something that you might want to acquire,” said Ulincy, himself a 35-year landman. It attracts big guys, like Exxon Mobil Corp., Anadarko Petroleum Corp. and Chesapeake, he said, and small guys, who make their living flipping oil properties.
But at $380 per person, it’s not really an event targeting the public.
Companies buy booths and then show off the prospects they most want to sell. They hang maps of play locations and underground depths. Company geologists, landmen and bean counters are all on hand to discuss the rocks, liquids, leases and costs associated.
Ulincy expects companies to be a bit choosy this year, given the state of the industry. Oil and gas land strategy now is a little like the board game Monopoly. It’s great to buy a good piece of land. But you can get a lot more out of it if you can put together several properties in a row — drillers can dig longer laterals, under more land, and unleash even more oil.
This year, Ulincy thinks they’ll pick just the acreage that lines up with their existing properties. In years past, if the prospect looked good, buyers would gobble up whole portfolios of properties. This year, they’ll negotiate for portions.
“We’re going to see people a little more constrained,” he said.
Ulincy expects 3,000 people and 200 booths, down by half from the conference’s peak in 2012 and 2013.
Ahot topic this year: stacked plays.
Most wells target one specific basin. But basins of oil and gas sit at different depths underground. And, sometimes, one plot of land sits above two basins. That’s called a stacked play and means companies can recover double the oil off of one piece of property. Stacked plays are getting a lot of attention in West Texas’ Permian Basin and in the Eagle Ford, southwest of Houston.
Some attendees this week will be looking for stacked plays, Ulincy said; others will be trying to figure out if acreage they already own can access multiple basins under it.
The expo’s business meeting starts at 8 a.m. Wednesday; the exhibit hall opens that afternoon and runs through Thursday.
And there’s one thing about the annual gathering that Ulincy likes best: Everyone is usually upbeat — even when business isn’t.
“We’re going to see people a little more constrained.” Bernie Ulincy, chairman of the NAPE conference’s operators committee