The calendar of the North American oil industry marks two celestial turning points: SPE's Annual Technical Conference in the fall and the North American Prospect Expo, known universally by its nickname "NAPE", in the spring. Last week I traveled to Houston to fete the occasion of the 24th NAPE.
By contrast to the dense, multi-track, highly technical program of SPE's event, NAPE has practically no program except conversations. Over 12,000 of us circulate around a cavernous exhibit hall and subsequent cocktail hours searching less for the namesake "prospects" and more for old (and new) friends
Besides the joy of seeing people, I find the array of booths, brochures and beer useful to peer into the mind of the industry. Trends assemble like a mosaic, one colorful piece at a time, and the emerging picture always fascinates me.
Here are some of the themes and observations from the vernal festival:
Never mind the shales, check out the sands! I showed up expecting to be overwhelmed by all Permian projects, but I was startled to see remarkably few Permian deals. And most of those were really small. It makes me think that the sandbox is so saturated that even modest-sized deals have been done or, more likely, get done fast, even without a show.
On the other hand, I don't remember the last time I saw so many fault maps and color-filled seismic structures! When prices turned down last year, the number of prospects shown seemed way down, and the collection was incohesive. I surmised that the wheel would turn back to conventional assets, and this year it seemed that most people turned back to the Gulf Coast. Conventional, seismically-based, exploration targets seemed to be the largest single theme.
Past years saw themes of mineral buying, which made a fair showing again, and of various shales, which seemed oddly missing. This year there were occasional opportunities in the Tuscaloosa Marine Shale, or the Mancos shale or STACK or the fringes of the Alpine High, but nothing like the Haynesville theme of 2009 or the Eagle Ford theme of subsequent years. While those previous themes seemed to resonate with the contemporaneous audience, it was not at all clear to me that the supply of sandstone prospects this year stirred the interest of buyers.
Except for. . . Buy-side interest did seem to be piqued, though, by one novel play making its debut at NAPE: San Andres residual oil zone (ROZ). Though only about three booths exhibited the play, interest seemed to be outsized. Fascinating play.
Technology and Products The vendor booths similarly offer insight to force-multipliers which are just emerging and those which are just gaining acceptance, and there were several which caught my eye. Here are the two most interesting plus a shameless plug.
- Oseberg Data: It has been years since a new data service has engaged my interest like Oseberg Data. They offer a truly novel data set and truly original way to look at it. What is more, they cover in depth an area which has historically been difficult to research--Oklahoma. I'm not sure yet that I like all of the functionality, but I'm looking forward to the demo.
- BetaZi: This technology I have been watching for a couple of years. In every test I've seen, the algorithm for probabilistic forecasting has been amazingly accurate. At NAPE they introduced a web-based, Spotfire-driven delivery for fully probabilistic forecasts of over a million active wells in the US. What is more, other users besides me seem to have become more accepting of the machine-learning technology which performs the analysis.
- Shameless plug: My own company introduced several free resources to assist in reserves and economics evaluations. Most notably, we are supplying models files for NYMEX strip prices on a weekly basis as a free download.
There were a number of other tools specialized for type curves and resource-play analysis. Mostly I was unimpressed, but there were a couple of interesting tools from Wood MacKenzie which includes some independent analysis and not just the same old raw data.
Barometer of mood Last year's NAPE began shortly after oil had bottomed in the $20s and while gas was around $2. Attendance was way down, and the mood was almost morose. Now that prices have improved and stabilized (at least as stable as normal), our industry's native, and essential, optimism has re-emerged. It is clear we are hungry again to return to our work.
What do you think? Mine was only one of about 12,000 experiences at NAPE. What did you see? What do you think it means?
It sure was good to see/meet you, Chris and Bryan and Janette and Dave and Jon and Dee and Shawn and Shinsen and Courtney and Jon and Chris and Bob and Trey and Craig and Todd and James and JW and Matthew and Meagan and Erin and Alex and Kyla and . . .