ETGS Membership,
Happy New Year ETGS! I hope all had a wonderful holiday season with family and friends. Thanks to all of you that joined us at “The Grove” for the Christmas Social.
As we start a new decade, our industry is again facing both great opportunities and challenges. We are leading the world in oil production (13 million barrels per day (bpd)) and we have seen a modest improvement in oil prices to $61+/bbl, but yet the rig count is dropping and the business environment feels very challenging. Similarly, in natural gas, we are growing to be the world leader in LNG exports but upstream drilling is slow with depressed prices. So what is going on? A recent Wall Street Journal article summed it up “Energy Producers’ New Year’s Resolution: Pay the Tab for the Shale Drilling Bonanza”. Easy credit and enthusiastic investors fueled the North American shale-drilling boom that flooded the world with oil and gas. Banks and Private Equity investors see that North American oil-and-gas companies have more than $200 billion of debt maturing over the next four years, starting with more than $40 billion in 2020, according to Moody’s Investors Service. As a result, these investors are demanding competitive rates of return and drilling activity is dropping to only the very strongest projects to improve returns and pay down this debt. This situation creates pain in the short term but in the longer term, energy demand continues it’s relentless growth and we will still be the primary suppliers for that demand for decades to come, even when renewable sources are factored in.
Bill Ambrose of the BEG will be our ETGS Lunch Meeting speaker on Wednesday January 15. He has a great talk planned that is titled “Depositional History and Stratigraphic Evolution Of The Midway To Carrizo Succession On The Western Margin Of The Houston Embayment, Southeast Texas”. As usual the meeting will be at the Cascades Country Club and starts at 11:30 am. Please remember to RSVP on our website for these events so we can properly plan sufficient food and seating for the talks.
Be sure to save the date for our annual ETGS Prospect & Tech Expo on March 31 at the Harvey Convention Center. We are working on speakers and will send out details as soon as they are available. Just a reminder that our East Texas Oil field Core exhibit project has been rescheduled to maximize attendance for students. The new time will be from April 25 to June 6. There will also be lectures on the evening of May 4th.
Ernie LaFlure
January 2, 2020