Survey sees firm E&P revenues

Gene Kliewer,
Technology Editor, Subsea & Seismic

HOUSTON -- An “age of plenty” is predicted for natural gas in the United States in a survey released by Deloitte yesterday at its 2009 Oil & Gas Conference.

“The overwhelming majority of survey respondents, 84%, say the best days for the natural gas industry are still ahead of us, despite today’s low prices,” said Gary Adams, vice chairman and leader of Deloitte’s oil and gas practice.

Adams continued to say the survey indicates an increasingly common view that the US energy business will be more natural gas based than thought just a few years ago. Oil, however, will remain the dominant transportation fuel source despite the issues and challenges of operations in deeper water, arctic discoveries, and more control by national interests.

Looking at budgets for 2010, the survey finds that about half of the respondents expect more layoffs, while 75% see reduced OPEX. Less than 15%, however, see cuts in exploration and production for 2010. The outlook for revenues, in contrast, generally is optimistic. Some 75% of the respondents think major operators’ revenues will grow and 67% see independent exploration and production companies’ revenues growing. In contrast to other predictions, 14% of the survey participants expect much in the way of mergers and acquisitions.

These same respondents think revenues will grow at service and supply companies (61%) and also at outside consultants (58%).

On the downside, 75% or more of those surveyed believe climate legislation will raise the cost of gasoline and natural gas for consumers, lower company profits, and lead to more layoffs without adding any new US jobs.

12/10/2009