2019 Conference Highlights

DUG Midcontinent: Hamm Says ‘Future’s Bright’ And Prices Will Correct

Harold Hamm, iconic founder, chairman and CEO of Continental Resources Inc., declared that “the future’s bright” for Oklahoma oil and gas as he opened the DUG Midcontinent Conference on Nov. 20.

The state has balanced resources and more oil than previously thought, Hamm said, noting that “We have a good regulatory structure. We do need commodity prices to recover.”

Hamm also acknowledged that production of NGL exceeded what the market could handle.

Continental Resources' Harold Hamm

“That will correct,” he said. “At present, it’s under a lot of pressure.”

Oversupply wouldn’t have been as bad, he said, “but we had a lot of elements from the market—basically private equity—and it overloaded the industry.”

Hamm also pointed to public capital as part of the issue, as well. Balancing of the market and discipline by producers are keys to a commodity price rebound, he said.

“That will correct,” he said. “At present, it’s under a lot of pressure.”

Oversupply wouldn’t have been as bad, he said, “but we had a lot of elements from the market—basically private equity—and it overloaded the industry.”

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DUG Midcontinent Day 2: Oklahoma Operators Discuss Challenges, Innovation

The second day of Hart Energy’s DUG Midcontinent kicked off on Nov. 21 with a closer look from both private and publicly traded operators, including FourPoint Energy LLC, Gulfport Energy Corp. and Jones Energy Inc. at a time when the oil and gas industry continues to be battered by weak commodity prices and investor demands for capital discipline.

2019 DUG Midcontinent Conference & Exhibition

“Investors are beginning to understand there are opportunities in the Midcon but not necessarily at scale,” Shak Ahmed, senior research associate of RS Energy Group, told conference attendees.

According to Ahmed, the top 30 Midcontinent operators average breakeven of $55 per West Texas Intermediate barrel. However, he said the top 15 active operators are generating marginal well economics. The path forward for producers is a stronger understanding of the rock, he added.

In particular, spacing development in the Scoop and Stack shale plays has also been a problem, according to Sarp Ozkan, director of energy analysis with Enverus.

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Harold Hamm: Shale-Based Growth Vital to US Economy

North America’s shale-driven “energy renaissance” has been the biggest change in the oil business since Saudi Arabia discovered vast crude reserves in the 1950s, and it’s crucial that the trend continue if the U.S. is to maintain a strong, prosperous economy.

Continental Resources' Harold Hamm

That was one of multiple points legendary Oklahoma oilman Harold Hamm made in his opening keynote interview with Oil and Gas Investor’s Nissa Darbonne at Hart Energy’s DUG Midcontinent Conference & Exhibition Nov. 20. The founder, CEO and chairman of Continental Resources Inc. touched on the success of his firm, the industry and the challenges both face.

“We can’t have 4% GDP growth without oil and gas,” Hamm said, emphasizing the importance of a strong domestic energy supply to support all aspects of a growing economy.

Closer to home, Oklahoma’s prospects as an energy producer “are bright,” Hamm told conference attendees. “We’ve more than tripled oil production, and gas production has more than doubled. We’re up to about 600,000 barrels per day of oil and 8.5 billion cubic feet per day of natural gas. We have a good regulatory environment here in the state. We do need for commodity prices to recover—we’d all be a lot happier if that happened.”

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The Diverse Midcontinent and Its Varied Potential

The Midcontinent confirms two rules of the exploration and production business:

  • Every pay zone’s different; and
  • The best place to find oil and gas is where it’s already been found.

Two executives who head privately held Oklahoma upstream players emphasized those points in a panel discussion at Hart Energy’s recently held DUG Midcontinent Conference & Exhibition.

Antioch Energy LLC's Nathaniel Harding

The western half of the Sooner State may get more publicity but there’s great potential on the state’s eastern side, Nathaniel Harding, founder and president of Antioch Energy LLC, told conference attendees.

“There is a tremendous recoverable resource here,” Harding said of his firm’s 24,000 net acres, “a large, quality position,” in Hughes County, Okla., that is “scalable, stacked and saturated.” Its wells target the liquids-rich Arkoma Stack, a play he rated “world class.”

Antioch targets three resources plays, the Caney, Mayes and Woodford that, combined, can offer 500 ft of potential pay. Wells with two-mile laterals cost some $4 million to $6 million with “fewer failure scenarios,” Harding said.

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