NAPE
NAPE, as always, was held in Houston in mid-February and over 15,000 people attended. What was different this year was the appearance of a number of investors who really stood out. Could it be like ravenous condo building in Denver and Houston before a housing crash or could it be a portend of things to come. More money is flowing into the oil business and even into the gas business. Many contrarians are buying gas assets as they are dirt cheap. Despite the high rig count for gas drilling, it’s expected to decline over the next year. Eventually gas supply will decline and move more in line with demand. Present low gas prices make most of the shale gas plays unsustainable and uneconomic. Most shale gas plays require a minimum of $6 gas to break even. Present drilling is more related to holding leases than any economic expectations. Predictions both at NAPE and a plethora of seers and soothsayers on CNBC, Bloomberg and Fox business shows all are predicting $100 to $150 oil by the end of the year. While there will be fuel switching, not many vehicles can use natural gas. So NAPE will be interesting next year to see if gas is on the comeback or still the laggard we have all come to know.
