As buyers and sellers gathered in Dallas for Oil and Gas Investor’s A&D Strategies and Opportunities conference, the talks ranged from opportunities in mature assets to renewed Gulf of Mexico activity. Private equity, public funding and new opportunities such as LNG exports became a focal point of presentations.
John Howie, Senior Vice President, Tellurian Inc.
Tellurian Inc.'s SVP John Howie said his company's approach to the natural gas business is fairly straightforward:
“We believe natural gas is a commodity-based business and our integrated model provides low cost,” he told attendees. “In a commodity-based business the low-cost guy is going to win.”
More than 700 billion cubic feet (Bcf) of natural gas is afloat as LNG on the world’s waterways today, he said. Each day, 40 Bcf is loaded onto ships headed to market. Howie said another 127 million tonnes of annual liquefaction capacity will be needed by 2025.
“We want to acquire and move [shale] gas to the front gate of [Driftwood LNG near Lake Charles, La.] for $2.25,” he said.
The afternoon roundtable focused on how insurance can reduce business risk. Matthew Wiener, SVP of Aon Transaction Solutions, moderated the panel.
Gordon Lindsey, Vice President, Corporate Development, Talos Energy Inc.
Gordon Lindsey of Talos Energy Inc. told attendees that Gulf of Mexico operations are looking better all the time. “We see tremendous opportunity in the Gulf,” he said Lindsey, during the “buyers and sellers” panel. “It’s getting more competitive with each lease sale.” Fresh off its merger with Stone Energy Corp. in May, Talos was rewarded with its prolific Zama discovery, which encountered 1,100 ft of gross pay. Jay Paul McWilliams, CEO of LOGOS Resources II, said private equity-backed E&Ps have opportunities when openings develop in mature basins as public money shifts to “hot” basins.
Daniel Houghton, Manager, Finance & Planning, Bruin E&P Partners LLC
Daniel Houghton, manager of finance and planning at Bruin E&P Partners LLC, extolled the benefits of operating in the Bakken Shale following its $1.4 billion purchase of assets from Halcon Resources in 2017. “When you buy in the Bakken there is a lot of production and it already has cash flow,” he said.
Patrick Oenbring, Chairman and CEO, Hawkwood Energy
Patrick Oenbring, chairman and CEO of Hawkwood Energy, told attendees Eagle Ford operations have “reached a point where we don’t need any more equity infusion.”Oenbring credited advances in completion technology as the driver of the company’s success in the Eagle Ford. “We’ve developed the completion recipe that works in the higher clay of East Texas,” he said.
On the public equity panel, Mike Kelly, managing director with Seaport Global Securities, said debt-adjusted growth has never been higher. “If oil prices hold, the amount of cash flow will be incredible,” he said.
Institutional investors are unenthused about oil and gas performance over the last five years. “It’s going to have to be private equity until public equity shows up,” said Chuck Yates, managing partner of Kayne Anderson Capital Advisors LP.