Nearly 1,300 oil and gas professionals attended the 3rd annual DUG Midcontinent conference and exhibition, an approximate 15 percent increase in paid delegates from last year. Attendees heard from top executives and decision-makers from the region's most-active exploration and production companies at the Cox Convention Center in Oklahoma City on February 24-26.
Dave Hager, COO of Oklahoma City-based Devon Energy, delivered the opening keynote remarks for the conference. Hager will become Devon's president and CEO effective August 2015. Chesapeake Energy Vice President John Adcock, from another Oklahoma City-based corporation, gave insights on increasing operational efficiency. He said pad wells are not the most efficient way to drill a well, but rather the most efficient way to move a rig.
Other notable speakers addressed the audience about promising field developments. Wade Hutchings, a regional vice president for Marathon Oil, told attendees 70 percent of Marathon's 2015 capital is allocated to U.S. resource plays. Kevin Phillippi, principal at A.T. Kearney, said each major refining region has seen asset base shifts due to recent economic conditions. He added the most profitable refineries are in Wyoming. Cheniere Pipeline president, Chad Zamarin shared plans for expansions, pipelines and markets. The company is working on the Creole Trail Pipeline, Sabine Pass LNG terminal and first LNG export cargoes projected for the fourth quarter.
Prospective attendees can mark their calendars for next year's DUG Midcontinent conference set for February 23-25, 2016 in Oklahoma City, OK.
Hart Energy would like to thank the 2015 DUG Midcontinentsponsors for their continued support.
The conference may be over, but the conversation continues on Twitter. Join in by following us @HartEnergyConf using #DUGMidcon or check out our Storify page.
President and CEO, Velocity Midstream
U.S. Lower 48 Upstream Analyst, Wood Mackenzie
Executive Vice President, Plains All American Pipeline LP
General Manager, Mid-Continent, Newfield Exploration Co.
Managing Director & Group Head, Oil & Gas, KeyBanc Capital Markets Inc.
President & CEO, Sheridan Production Co. LLC
Principal, A.T. Kearney
Manager, NGL Market Origination Phillips 66
Vice President, Business Development, FourPoint Energy LLC
Senior Vice President, Drilling & Completions, Jones Energy Inc.
Vice President, Energy Marketing and Trading Florida Power & Light Company
Dr. Austin A. Holland
State Seismologist, Oklahoma Geological Survey, University of Oklahoma
Technical Advisor, PE & Cement Halliburton
Vice President, Mid Continent North Business Unit, Chesapeake Energy Corp.
Day Rates For Midcontinent Premium Rigs Down 40% Spot market rig rates have fallen 40% for premium Tier I rigs in the Midcontinent and 36% on average for all other rig classes in concert with the collapse in drilling activity. Operators are only drilling to hold leases outside the Cana Woodford/Scoop play where rig count remains static. Roughly half of regional drilling activity is on a well-by-well basis with operators elsewhere finishing out contracted drilling programs and holding off on renewing contracts and activity. Spot market rates are anecdotal because of a lack of demand for drilling services. Contractors meanwhile are folding add ons, such as top drives, back into the day rate, further exasperating the steep decline in pricing. A few survey respondents indicated operators are looking towards late third quarter before venturing back into the market. Watch for the next Midcontinent land drilling survey in July 2015.
New Source Energy Partners’ Deal Hands Over E&P Power Larry E. Lee, who helped create the company that became Halcón Resources Corp. (NYSE: HK), is on the move again, buying Permian Basin assets and, more recently, interest in the general partner of an MLP.
Through the deal, Lee would be able to acquire control of the E&P activities of New Source Energy Partners LP (NYSE: NSLP) if certain conditions are met, including the purchase of some of Lee’s oil and gas assets. The transaction is another sign that E&P MLPs may be struggling more than their publically traded cousins in the downturn.
New Source said April 27 that Lee’s 2100 Energy LLC acquired an 18.4% interest in New Source Energy GP LLC. The interest was purchased from Kristian B. Kos, New Source’s chairman and CEO. New Source is an Oklahoma City company with conventional resource reservoirs in east-central Oklahoma and oilfield services that specialize in increasing efficiencies and safety in drilling and completion processes.