The obvious theme at the 39th annual Howard Weil energy investment conference in New Orleans was that shale-gas development as a driving E&P force has been replaced by oil production, using technologies developed for shale gas.

It seemed as if every E&P's presentation contained mention of Eagle Ford, Niobrara or Bakken activity; just a short while ago, Haynesville, Marcellus and Barnett would have been more likely. This was not, however, simply the usual buzz about hot new plays. Rather, it reflected the changing dynamics of natural gas pricing and world oil demand.

Keynote speaker Andrew Gould, chief executive officer of global oil services giant Schlumberger Ltd., gave the big picture.

"The last decade was marked by a fundamental shift in the security-of-supply argument, which having been an OECD concern for the past 100 years, became China's obsession," said Gould in his opening remarks. After rattling off a litany of countries functionally closed to outside exploration, or with questionable records with external operators, Gould claimed that "resource nationalism" was spiking, leaving 75% of known conventional oil reserves closed to international private capital.

Pioneer Natural Resources Co.'s presentation was an example of Gould's theory in action. CEO Scott Sheffield explained how his company presciently got out of Tunisia recently, and into 20,000-plus locations in the Midland Basin's Spraberry trend, and South Texas' Eagle Ford play, with 38 rigs now, ramping to 60 next year.

"A year and a half ago we were at zero rigs in those two plays," he said.

Independents aren't the only companies headed to the U.S. Jim Flores, CEO of Plains Exploration & Production Co., noted the return of the majors. "The majors are back onshore U.S. for the first time in 30 years," he said. He predicted $85 or higher oil prices for the next half decade or more. Considering the majors' situation, this is not surprising. With deepwater Gulf of Mexico permitting a slow grind, they were already looking around for opportunities. Harkening back to Gould's list of places off limits to international oil companies, catching the new U.S. onshore oil upswing is probably not a bad idea.

Aubrey McClendon's standing-room-only address showed the magnitude of the domestic oil resurgence. The CEO of Chesapeake Energy Corp. cut right to the chase.

"The global energy industry wants to be in the U.S.," he said.

He cited Chesapeake's joint venture with China National Offshore Oil Co. (CNOOC), which bought stakes in Chesapeake's Wyoming, Colorado and Eagle Ford shale assets. In February, Chesapeake announced the sale of its Fayetteville shale assets to BHP Billiton, an Australian company.

The technological advances that lead domestic E&Ps to take a new look at existing basins, combined with international circumstances, have drawn some big international players, with big money. Their desire for North American production is not limited to the recent and obvious oil transition. They also like natural gas here, which looks undervalued compared to global gas prices.

"There is a market out there for assets that looks through low gas prices this year, and maybe next year, and looks forward to years ahead when gas prices will be much higher than they are today," McClendon said. But Schlumberger's Gould hinted at a possible difference in the way shale gas will be developed around the world.

"We are convinced that the brute-force approach of shale-gas production in the U.S. will not be usable globally," he said, adding that more accurate evaluation and characterization of shale-gas reservoirs would be necessary before drilling in international shale plays. That sounds expensive.

Anadarko Petroleum Corp. CEO Jim Hackett mentioned a deal it has forged with Korea National Oil Corp. in the Eagle Ford condensate window, in Texas, for $1.6 billion. More than one CEO referenced Encana's JV in Canada with PetroChina.

Think again about $4 Henry Hub gas prices, and gas price conditions in Europe and Asia, and U.S. gas reserves look cheap. It's the same story with $100 WTI (West Texas Intermediate) oil, when Brent crude is trading for $120. Compared to other locales, the U.S. looks like a good deal, even without discounted assets. Until now, international companies like CNOOC did not have an entrée to onshore U.S. plays.

McClendon told attendees, "Investors around the world have never looked to the U.S. for oil-volume-growth stories." They are now.

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