[Editor’s note: This story appears in the May 2020 edition of E&P. Subscribe to the magazine here.]
The cyclical nature of oil pricing is not a new nemesis for the petroleum industry. With every bust, there are promises to manage the next boom better, only to have those promises fall from memory as more distance is put between the good times and the bad.
But this time, the bust feels different. It is not just us.
Disruption has leveled all industries. Like the tall pine that bends when strong winds blow, so too will the aviation industry, the tourism industry, the petroleum industry and more. We are strong.
Usually, this time of year is a busy one for the oil patch. It is a time that would bring with it preparations for a busy drilling season and prayers for a quiet hurricane season. For most school children, the end of May signals the start of the summer break, family vacations and more. But then the double-gut punch that is the COVID-19 pandemic and the lowest oil prices ever recorded changed all of that.
Like many of you, Hart Energy staff has been working remotely for weeks, trying to make sense of it all, sharing our insights with you through countless emails, HartEnergy.com articles and webinars. One thing made clear is that disruption has touched us all.
It seems so long ago that our primary concerns were the shortage of a skilled labor workforce or U.S. presidential candidates and hydraulic fracturing bans. These still valid concerns went to the backburner, to be addressed after the COVID-19 crisis eases.
Opportunities, however, have emerged from the rubble of what was “normal.” They encourage us to look back and take stock of what worked and what didn’t, to fix what is broken and test what is new. The risk inherent with testing, be it a new play or unproven technology, scares off most. It is the gambler who takes the chance only to reap the rewards or suffer the consequences.
It was not without some irony that the Gambler himself, the late Kenny Rogers, cashed his chips in around the same time that the price of WTI dropped into the low $20s, only to dip below that mark a few days later before settling at sub-zero digits on April 20—the 10th anniversary of the Macondo tragedy.
It will take armies of risk-takers to capitalize on the disruption-fed opportunities. Let us all learn from the lessons of the bust and build a better tomorrow.
We are bent but not broken.
Recommended Reading
Seadrill Sells Three Jackups for $338MM to Gulf Drilling International
2024-05-17 - Seadrill Ltd. is also selling its 50% equity interest in the joint venture that operates the rigs offshore Qatar.
Could Crescent, SilverBow Buy More in South Texas After $2.1B Deal?
2024-05-17 - The combination of Crescent Energy and SilverBow Resources will yield one of the Eagle Ford’s top producers—and the pro forma E&P could look to gobble up more acreage in South Texas after closing.
Permian Powerhouse: Apache Doubles Down on Core Assets After Callon Acquisition
2024-05-16 - Apache CEO John Christmann detailed plans for the Permian Basin and Suriname during the SUPER DUG Conference & Expo.
Crescent Energy to Buy Eagle Ford’s SilverBow for $2.1 Billion
2024-05-16 - Crescent Energy’s acquisition of SilverBow Resources will create the second largest Eagle Ford Shale E&P with production of about 250,000 boe/d, the companies said.
Diamondback’s Van’t Hof Plays Coy on Potential Delaware Divestiture
2024-05-16 - Diamondback Energy’s President and CFO Kaes Van't Hof also addressed new Permian exploration and the lack of “fun” dealing with the FTC on its deal to buy Endeavor Energy Resources.