High price of crude oil draws investor interest at OKC expo

Journal Record, The (Oklahoma City), May 7, 2008 by Jerry Shottenkirk

It never hurts to collect as many business cards as you can, especially when you're in the oil and gas industry.

Dewey F. Bartlett Jr., president of Keener Oil and Gas of Tulsa, manned one of the dozens of booths Tuesday at the Mid-Continent Oil Expo at Cox Convention Center.

The expo is a smaller version of the North American Prospect Expo, which occurs twice annually in Houston. The idea is to sell prospects, or at the very least put a bug in someone's ear about the availability.

"This waves the flag for the oil and gas industry and does other things as well," said Bartlett, a past chairman of the Oklahoma Independent Petroleum Association, which is sponsoring the two-day event.

"Our company has several prospects to show. It's rare that we actually sell one at these, but a lot of people express an interest. You can talk of geology and terms even if there isn't a sale. If there is an interest you can still contact each other down the line."

With crude oil above $121 per barrel, the interest has soared, he said.

"We're mostly oil and we've had a lot of people come through today," he said. "They are interested in crude oil prospects and general interest in the industry as far as investments. Oil at more than $120 is crazy. Personally that's too high for me. We enjoy the revenue stream, but I'd be happier if prices were a shade under $100. At these prices, the industry is on everyone's radar. Perception is a killer sometimes. It drives political ambition."

Bartlett said there isn't much the industry can do about the movement of New York Mercantile Exchange futures.

"Pricing is out of our control," he said. "Today, the prices are driven by the weak dollar, lack of supply, and increased demand in China and India. It will be that way until we find other sources."

Over 80 companies are represented at the expo, which continues today.

Jeff Robinson, president of locally based Fremont Exploration, stood as his booth and showed a map of prospects in the Cambridge Arch/Central Kansas Uplift play of northwestern Kansas and southwestern Nebraska.

Modern technology has made it possible for such areas to garner attention.

Robinson has thousands of acres and wants to liquidate them or find investors in the properties.

"On the front end, we made a modest profit on acres. Buy for x, sell for y," he said. "The play was developed and conceived by a group of independents out of Wichita, Kan. Peak Resources of Durango, Colo., said there could be 20, 30, 50 wells.

A $1 million block would include 10,000 at $100 per acres.

Such sales are lucrative, but the expo has other important functions, Robinson said.

"It really has two purposes - the presentations that have outstanding speakers and the trade show," he said. "In the exhibit area you show prospects, bring in partners or sell properties. There are many different companies that do different things. You can't duplicate these connections with a telephone book."

Another representative there was Jerry Simmons, executive director of the National Association of Royalty Owners. Instead of selling prospects or looking for investors, his appearance was mainly informative. Mineral rights and royalty rights are also a concern to producers as well as land owners.

Investors, exploration companies and producers are more interested in prospects, but it helps NARO to be part of such expos, Simmons said.

"Our national headquarters is in Tulsa, and anytime there's an event like this we like to have a presence," he said.