The first day of EnerCom’s 21st annual edition of the The Oil and Gas Conference® is in the books, and conference themes are beginning to take shape. Twenty-eight presentations were given on day one. CEOs from Canadian companies drilling the Montney, to Australian based operators, to Permian drillers– EnerCom is a global affair.
Here are a few observations from day one:
- All eyes on the Permian: As acquisitions and divestitures heat up in the Permian, so does investors’ interest. As one institutional investor from New York mentioned, the cost structure in the Permian is about the only area where a company can achieve sustainable growth. Lower well costs, higher EURs, and sustainable IRRs are all a staple of Permian economics. This isn’t to say that other core areas are economical, but the Permain carries the greatest swath of economic acreage of any play in North America at the moment.
- Where have all the short sellers gone: Last year’s EnerCom conference brought a lot of unique perspectives to the table. Chatter surrounded the volatility of oil price, pending fire sales and bankruptcies, and the realigning of the industry toward more appropriate capital spending. Among the chatter were investors lining up targets to short, under the assumption of impending doom. Curiously, many of those attendees from last year aren’t present this year. Conference attendance has remained strong and on par with last year, but the crowd has been more representative of a long position, likely a good sign for the long-term prospects for the industry.
- So much sand talk, you would think you’re at the beach: The discussions of efficiencies often involved discussion about sand and fracture techniques. As laterals get longer and frac stages increase, companies are increasing sand volumes and fine tuning the type of sand they use. Investors questioned executives in company break out meetings on a regular basis during day one, and executives were happy to oblige the discussion on the how sand was increasing the recoverable assets in wells.
Day two of the 2016 EnerCom conference is underway.
