Oil plays were everywhere at Winter NAPE 2011. Some 16,000+ attendees looked hard at prospects across North America and around the world, cruising the aisles and crushing into booths showing oil-focused projects.

Bakken, Niobrara, Mississippi Lime, Wolfberry, Wolfcamp and Wolfbone exhibitors packed in serious questioners. People were in the mood to buy, and they were intent on finding the deal that fit their goals.

Noticeable at this show were the many young people. Unconventional resources have not only revitalized the nation's natural-gas supply; they also appear to have revitalized the industry's workforce.

Money folks were in good humor, as the beginnings of a national economic upturn and strong prices for crude lent a cheery atmosphere to the exhibit floor.

The exuberance did not extend to all sellers, however. Among the natural-gas plays, Marcellus and Utica prospectors had steady interest, but booths showing once-hot plays such as the Haynesville and Fayetteville were quiet. The same was true for Gulf of Mexico prospectors.

Nonetheless, a number of contrarians doggedly made the rounds of the gas plays. It's a good time to be a buyer, reasoned one gentleman, who declined to be identified. "We think that with our engineering talent we can make much better wells in some of these out-of-favor reservoirs, with higher IPs and higher EURs. We're out looking for the hidden gems."

Popular Permian plays

Permian Basin booths were bustling: Jason Hoisager, manning the Elephant-Arabella Operating LLC exhibit, was enjoying robust business. "There's not another place in the world you can come and get this many ideas and see what's going on," noted the Fort Worth-based landman.

The two-year-old company works in the Permian and Fort Worth basins. This NAPE, it was showing an acreage block prospective for Wolfcamp and Bone Spring in Reeves County, Texas. Elephant-Arabella has acquired 35,000 net acres, and was offering interest in 7,700 acres of its prime leases. Selling points for the project include an exceptionally thick Wolfcamp section and active drilling to the north. Typically, the company keeps a working interest and a reversionary interest in its projects.

"We're looking for an operator that has experience," said Hoisager. "Traffic is great, and we feel we can be very selective."

To entice potential buyers to stop and talk, the company was also prominently displaying (but not selling) a 200,000-barrel-per-well prospect it has successfully drilled in northeast Glasscock County in the sizzling Wolfberry play. The map drew steady questions and comments, and certainly achieved its purpose.

"NAPE is an exceptional marketing tool," said Hoisager. "We've definitely made contacts at NAPE that we've sold deals to, and we've also found that the threat of showing a prospect at NAPE can sell a deal as well."

Additionally, Hoisager always takes time out of the booth to scout around. "We determine what plays we want, which ones are on the horizon, and which ones we're not interested in."

Niobrara attraction

Rockies plays, led by the oil-rich Bakken and Niobrara, were well represented. And it's been a long time since Rockies players experienced such strong interest.

Steve Strachan, president of Denver-based Strachan Exploration, was a first-time exhibitor. He was showing a 45,000-acre Niobrara prospect in the red-hot shale play. The company was looking for a partner for a well it plans to drill in the Powder River Basin in Converse County, Wyoming,

The prospect is in a great neighborhood: it’s on the flank of historic Teapot Dome Field, which has produced several million barrels of oil from the Niobrara and Steele shales. Neighboring leaseholders include EOG Resources, Chesapeake Energy and Whiting Petroleum.

"I'm looking to partner with an operator experienced in horizontal drilling, and I'm also entertaining offers for an outright asset sale," said Strachan. His 50% interest in the project would sell for $22.5 million, and Strachan would require a couple of commitment wells.

Interest was extraordinary. The geologist gave away 50 pounds of materials at NAPE; he was amazed at the attendance and the energy of the show. "I love showing deals, and I met a lot of people I wanted to meet, including people from companies that were drilling near my prospect," he said. "I had so many potential buyers on the first day that I didn't get a drink of water for six hours."

Most impressive for Strachan was the access NAPE provided to high-level buyers. "It's hard to make appointments one at a time; people are so busy and it can be an imposition into their internal work day," he said. "But people attend NAPE to look at deals and they very much want to see the prospects."

Old-school and on target

While unconventional projects seemed to dominate the exhibit floor, a number of companies proudly presented bread-and-butter conventional prospects. What's not to love about light oil, high-porosity and high-permeability reservoirs and seismically defined structures?

At the Mannon L. Walters Inc. booth, the company was showing a conventional, shallow South Louisiana oil prospect with a long and fruitful history at NAPE.

The Evansville, Indiana-based operator originally bought the #1 Darsey et al prospect at NAPE as a reentry in the decades-old Lapeyrouse Field in Terrebonne Parish, Louisiana. The prospect hit, intersecting 11 pay zones. IP was 98 barrels of oil and 80,000 cubic feet of gas per day from 8,009-12 feet in Oligocene.

Then the company expanded to a look-alike prospect. The location for the second prospect is currently being built; it's a test of a separate closure east of the Darsey structure.

"You could call this a convention prospect," said Forb Phillips, executive vice president. "We bought it at NAPE and drilled a discovery. Then we sold a related prospect again at NAPE, and now we're back with a third deal."

At Winter NAPE 2011, Walters was offering its Lapeyrouse North prospect. It's a 6,500-foot test of several intervals on the upthrown side of a fault-bounded structural closure. Objectives are stacked, shallow zones encountered in the Darsey discovery, including the 5,000-foot Sand reservoir that exhibits a seismic amplitude anomaly. If successful, the project is estimated to produce at initial rates of 150 barrels of oil and 150,000 cubic feet of gas per day.

"We like to have a continuing presence at NAPE. It shows our commitment and our stability, and it helps us forge relationships," said Phillips. "We've been at NAPE for many years, and we've grown from a single booth to a double, and now we have a triple."

Contact the author, Peggy Williams, at pwilliams@hartenergy.com.