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Permalink Reply by gary smith on January 20, 2015 at 8:55pm

Pittsburgh is in receivership because of failed democrat run politics. philly needs 70 % of the 7.7 billion the state is short on government pensions. Pittsburgh has a ban on fracking and the city is sitting on a fortune in OIL.    losing this convention is small peanuts to what they themselves have done to themselves.

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Permalink Reply by Barb Smith on January 20, 2015 at 9:22pm

Well I guess I am not too worried about the economy of Pittsburgh, I think it will either get better or maybe worse. And as far as politics I don't really care much about it, they are all crooks and bums and should be made to live like the rest of us.  The point was the cancellation of an event like this does not help the economy of  the region. The event is mostly from what I understand a gathering of all the big Oil and Gas and Service companies to showcase their latest technologies and trade and sell and barter acreage prospects and drilling prospects  through out the Appalachian Basin. Its all about the Utica and Marcellus and possible future and present development. I don't think they are cancelling the NAPE conference  in Houston or Denver set for later this year.  But if Oil and Gas both keep tanking like they have been who knows ?

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Permalink Reply by Dexter Green on January 20, 2015 at 10:09pm

The expo is no longer listed on NAPE's site.  

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Permalink Reply by Barb Smith on January 21, 2015 at 8:15am

Dexter you seem to be pretty informed, what effect might this have on development in the Utica and Marcellus shales ?

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Permalink Reply by Dexter Green on January 21, 2015 at 10:23am

So I've been to a few of these, both in Houston and in Pittsburgh.  There are three reasons to go:

1. You want to sell something (lease package, new drilling tech, etc), so you have a booth as a vendor

2. You want to buy something

3. You work in the industry and want to meet new people and go out drinking and dining on someone else's dime

With a total collapse within the basin (and the larger macro trend) the sellers are likely terrified of the expense of renting booth space, shelling out for sponsorship rights, and spending money on the general idea that drumming up interest in their company/deal when there are fewer buyers.  A lot of law firms who do title work will sponsor cocktail hours and meet-and-greet functions.  With a sharp downturn it's a lot harder for Company X to justify ponying up $50,000 for an elaborate function when you know your business is going to suffer from the market disruption.  

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Permalink Reply by Jim Litwinowicz on January 21, 2015 at 10:44am

Keep in mid that the promoters of these NAPEs are in it for the money.  That is they intend to make a profit on the show itself by renting booth space and charging high entry fees.  If vendors are not renting space then they will lose money.  I'm guessing that is why they cancelled.

Which begs the question; why are vendors not renting?  NAPE is a special event geared to companies looking to lease O & G rights along with land companies that have land to lease. If no one is leasing, there is no need for NAPE.

Leasing has died off because of two reasons. One is the very low price in both oil and gas.  Companies do want to make multi-million dollar commitments until they see a stable market.  The other is that most of the prime areas in both the Utica and Marcellus are already leased. Lack of infrastructure in many areas is also a big problem.

Cancelling NAPE is about the lack of leasing and doesn't say much about drilling and production in the area.  Companies with large leaseholds will continue to drill but at a lower rate.

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Permalink Reply by Barb Smith on January 21, 2015 at 12:56pm

Dexter and Jim, thank you for the informative replys. I think I may have a better understanding now.

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Permalink Reply by Tim on January 22, 2015 at 8:14am

Jim,

You make solid points. However, some of these companies ballooned their payroll, # of employees, as they had so much acreage to conduct due diligence on, and get title work completed. Thus their need for a unique (high) level of employment was necessary. But those high levels of employment were always going to be temporary in nature, those levels were unsustainable in the longer term.

Also, as these companies are large local employers, they have relationships within the communities and across the political landscape. They simply can't layoff large groups of workers with out reason, as they have to pick up the phone and answer tough questions from politicians.

With the recent downturn in pricing, it gives the E&P companies the 'cover' needed to make a proactive phone call, explain why they need to cut workers, and then they remain in good standing with local/regional politicians.

Inevitably, there was going to be layoffs regardless of the commodity prices. The recent move just exacerbated the event and brought it forward.

The majority of these companies have more than enough acreage that needs to be hbp'ed before they need to aggressively add acreage.

Shell is actually bringing a rig up to nw tioga to drill more wells in the northern Utica, so the plays continue to be regional in nature.

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