Thursday, October 8, 2015

Active rigs:

	10/8/2015	10/08/2014	10/08/2013	10/08/2012	10/08/2011
Active Rigs	67	190	184	193	194

RBN Energy: low oil and gas prices mean bargains for producers and midstreamers.

For nearly two months -- Since late July -- WTI crude oil prices have averaged $45/bbl, never once closing above the $50/bbl mark.  Over the same period, the natural gas price at Henry Hub has averaged $2.70/MMbtu and now languishes $.20/MMbtu lower.  Is this a time to be wallowing in misery and self-pity?  Absolutely not!!  This is the time for midstreamers and producers to reposition their businesses with a laser-like focus on the opportunities that low prices have served up.  There are bargains out there in the oil (and gas) patch.  If producers are in the right locations, with drilling costs much lower than last year, there is good money to be made.  And likewise, opportunities abound for midstreamers to pick up assets at very attractive prices to get that production to market.  But to execute such a strategy, you must have a rock-solid understanding of what is really going on in today’s markets for crude oil, NGLs and natural gas.  Our goal for the upcoming State of the Energy Markets Conference scheduled for October 28, 2015 in Denver, CO is just exactly that - to give you a rock-solid market knowledge based on hard data and thorough analysis.  Today’s blog is an advertorial for the conference.

RBN’s approach to pulling this hard data and analysis together is a bit different than your run-of-the-mill consultancy.  For example, we don’t forecast prices.  Ever since crude prices crashed last year, we concluded that there are just too many moving parts in the global oil market for us (or anyone else for that matter), to come up with a single view of what will happen to prices over the next few years.  So instead, we start with multiple price scenarios – possible trajectories for prices that are plausible, based on what we know now about the market. We don’t consider these scenarios high or low cases, reference cases or any of the other standard nomenclature.  A scenario is simply a time series of forward prices that we can use in our modeling methodology to understand market responses.