Prospect Hunting Enters New Era

It would make an appropriate theme song for the oil and gas industry. Just take an old tune popularized by that enduring pop trio from the '60s, and add new lyrics:

Where have all the prospects gone?

Unfortunately, this is for real, and it's nothing to sing about.

When commodity prices began their relatively recent ascent, production became a major focus of the E&P companies to lock in badly needed cash. Some impressive profits resulted, and exploration budgets at last are being beefed up.

But today, these companies face a whole new dilemma: So much money, so few drilling prospects.

"There's a tremendous prospect shortage in the industry," said Dan Smith, Houston independent-consultant, "and the exploration ranks have dwindled to where we don't have the manpower to solve the problem.

"We're in a real oil and gas supply crisis," he added, "and I think we're going to be forced into making it better. The only way to solve it is to find more oil and gas."

Scott Laurent, owner of Laurent Oil & Gas, concurs there's a lack of prospects but noted although people are selling deals, there appear to be more lookers than buyers.

"People are willing to spend money on certain plays," he said, " but it's not universal."

Of course, the more exposure a prospect gets, the more likely it is to attract a buyer.

Prospect expos, such as the upcoming AAPG Property and Prospect Exposition (APPEX) in August, are custom-tailored to meet this need. The Houston event is a cooperative effort between AAPG, Society of Independent Professional Earth Scientists, and Houston Geological Society.

APPEX steering committee member Smith said the timing of AAPEX would allow it to supplement the North American Prospect Expo (NAPE), an annual event held early in the year. He noted that many companies operate on a calendar year and are looking to wrap things up at the end of December.