David Paganie
Managing Editor

HOUSTON --A panel of executives from independent oil and gas companies discussed their market strategies at the Offshore Technology Conference.

Moderated by Greg Carter, Nautilus Offshore, the panelists each presented their strategy based on the premise that today's industry is facing technical challenges, lack of rig availability, rising commodity prices, increasing service and supply costs, workforce issues, weather-related risks, and geopolitical concerns.

Tracy Krohn, W&T president and CEO, spoke first, focusing on the company's plans in the Gulf of Mexico. W&T is one of the largest producers and leaseholders on the shelf. Last year, the company acquired Kerr-McGee's shelf assets, and they don't intend to stop there, Krohn said.

"We believe there are plenty of assets in the GoM available for sale in the coming years," he said. "We like the GoM because money comes back to you very quickly. The rate of return appears to be the best in this region, compared to international markets."

On the topic of increasing costs, Paul Ellis, Serica Energy chief executive, said, "The prices of drilling equipment in the North Sea are horrific!"

Martin Ferron, president and CEO, Helix Energy Solutions, weighed in next, citing plans to take its GoM-established business model international. "We are exporting our business model anywhere in the world where there are small fields, starting in the North Sea and Far East," he said.

Helix's niche strategy is investing in marginal fields. The company will use its inhouse fleet to drill, develop, and produce the fields it operates. Its first drilling rig, convertedQ4000, is scheduled to enter the active fleet in the third quarter. "We plan to have 2 to 3 of these rigs in the next 2 to 3 years, pending the success of the first one," Ferron said.

Bill Schneider, vice president – international, Newfield Exploration, said its critical strategy in today's environment is exchanging assets for rig time. "We don't have enough acreage in deepwater to secure a rig for a long-term project, so we're selling interest in some of our deepwater portfolio to a company that has drilling equipment secured in order to obtain a rig to complete wells," he said.

5/2/2007