Hard times don’t dim hopes for oil
NAPE, the nation’s premier conference for buying and selling oil and gas land, opened Wednesday at the downtown convention center, its attendees hoping to cut deals despite two years of hard times.
Signs of the oil crash are everywhere here at the conference formerly known as the North American Prospect Expo. Geologists and geophysicists said they haven’t found work in months. Landowners have struggled to lease mineral rights. Drillers talked of canceled contracts and new business strategies.
The conference itself embodies the downturn. Emptier hallways. Smaller booths. Fewer big companies.
Shale pioneer Chesa-
peake Energy Corp. has pulled out of all annual NAPE shows. Oklahoma City explorer Devon Energy sent workers this summer but no longer has a booth.
Houston-based Asset Risk Management Energy is gone, too.
NAPE expects 3,000 attendees this week at the George R. Brown Convention Center, half the number that attended in summer 2012, when it seemed the shale drilling boom would go on forever.
Walt Wornardt still attended this year, however. He has been in the business for three decades and has gone to NAPE twice every year since it started almost 25 years ago.
Wornardt hasn’t been able to find work for nine months.
A geologist, Wornardt studies rock samples to give landowners and drillers insight into the potential for oil and gas underneath them.
But companies, he said, aren’t doing much exploration these days.
Instead, they’re drilling land they already know has oil. Wornardt said he sent out 40 proposals during the past year to evaluate company wells.
“And I have no returns,” he said. “Business is that bad.”
And so it went, in the booths and hallways of this summer’s NAPE.
Geophysicist Bruce Blake worked in Madrid for the Spanish energy giant Repsol last year.
In February, he was encouraged to retire. Now he’s out on his own, an independent consultant.
His last paying assignment was in May.
“We’re waiting for oil to rebound,” he said.
So, as Blake walked the NAPE floor looking for jobs, he also was watching for oil prospects for himself.
Maybe, at the winter conference, he’ll have his own booth, pushing his own prospective oil wells to potential investors.
Justin Burgess, an owner of the small mineral-rights company Arete Acquisitions, said leasing deals are down because companies aren’t really looking for more land to drill. But land sales are up, he said, because it’s a good time to buy land cheaply and sell it to longterm investors.
“We’re meeting fewer people,” Burgess said of recent conferences. “But we’re meeting more important people.”
And David LaPrade, chief executive of USR Energy Ventures, said the downturn has changed the direction of his company. LaPrade spent the last 15 years drilling wells in Malaysia, Indonesia, India, Pakistan, Yemen and other foreign hot spots. But when the crash hit, major oil companies postponed or delayed $10 million in work with USR.
“So I said, ‘Let’s go back to the States,’ ” LaPrade said.
Now he’s turned part of his drilling firm into an oil production company.
Oil explorers don’t have cash to dig wells, he said. So LaPrade offers to put up the equipment and manpower to drill in exchange for a piece of the proceeds.
USR Energy drilled its first well as a production company in East Texas at the end of May. And how’s business? “It’s hard,” he said.