Haven't you heard? There's gas in them thar shale formations. And if the parking lot outside of the Intercontinental Hotel in Addison was any indication this morning, a goodly number of the players are in town, looking to make fat deals. You could tell because parking was spilling out into the gravel overflow lot across the street, and every other vehicle was a $40,000 to $50,000 4x4 with a custom steel bumper and grill guard. By looking at their trucks, you might even guess what rung they occupied on the fossil fuel ladder. Some looked like they'd just come off a caliche backroad. Producers maybe? The guys developing the lease, hoping to entice "the big fish with deep pockets," like Exxon.
But other 4x4s had that showroom gleam. The money men, perhaps? The capital-raising middle men looking for the leaseholder who just needs a bump.
Yeah, they were all in attendance at PLS' Summer Dealmakers Prospect and Property Expo, where "oil and gas operators, prospect generators and property buyers" come together and get rich. Hell, I could have tossed my (figurative) reporter's hat and picked up a dealmaker's fee that probably dwarfs my yearly salary just by introducing Eagle Ford Shale lease-holding Joe Developer to Jimmy Capital, who's got some investment money burning a hole in his pocket. You could almost smell the cash.
And by the way, if Eagle Ford doesn't mean anything to you, it should. It's the next Barnett Shale, and it stretches from the Mexican border deep into East Texas. Everyone here was buzzing about the big EF.
Take Max Smith over at Slate Holdings. He wore a dapper, gray suit with black snakeskin loafers, and one of his cheeks was slightly concave. He says he's leased a million acres in the Barnett and operates 120 wells. He started out as a roughneck on a derrick. Now look at him.
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The pessimists have been telling him for years that Texas is all played out. Then dendritic fracturing comes along, and all those played-out wells come back to life. Gas prices go up and, lookie, we're rich again. And then the Eagle Ford is discovered, and it's a three-tiered play with limitless possibilities. You've got oil, oil-gas condensate, and then you've got dry gas. From 6,000 feet to 20,000 feet, he said, it's fair game.
But as I strolled the crowded corridors between the industry booths and their petroleum-preaching buskers, I noticed they weren't all colorful, old-school types who got their starts as grit-eating roustabouts. There were preppy young finance bucks aplenty, their smooth skin untroubled by a past spent in the Permian sun. They hailed from all manner of LLC, invariably with the word "investment" somewhere in the company name. After all, money's what makes the world go round, and it's the money that puts holes in the ground.
And it's just lying around all over the place, waiting for someone to pick it up, from what I heard. Hanes Chatham, for example, had a cutting-horse business in Fort Worth. The lanky Texan, who wore a black felt hat, an off-white blazer and pale leather boots, saw an opportunity. The Barnett was picking up, and it just so happened that he knew all the ranchers sitting atop suddenly lucrative real estate. Connections were forged, deals were cut, and suddenly Chatham is an old-school landman, relying more on knowledge of the countryside and personal relationships than hyper-technical knowledge of the shale.
The point is, there's a boom on, folks. Get on it while the gettin's still good.