Jordan Blum, editorial director, Hart Energy: We are here at Hart Energy's Energy Capital Conference in Dallas. I'm joined on this Hart Energy LIVE Exclusive interview with Dan Pickering, the founder and chief investment officer of Pickering Energy Partners. Right off the bat, where are we in the cycle? What are we looking at?

Dan Pickering, founder and chief investment officer, Pickering Energy Partners: Jordan, good to be here. The great news is, I think we're still pretty early in this upcycle. Cycles in the oil and gas business tend to be long. We had a shale boom, we had a shale bust and now we've got kind of the next chapter and that next chapter feels like we're a couple years into something that could last for another five plus. So still pretty early, fingers crossed.

JB: So we're a little over $90/ bbl now. What's kind of the sweet spot versus how high you think it might get?

DP: Predicting price is always a challenge and there's a lot of focus right now on oil going into triple digits. Commodities can move dramatically in the short term, so I wouldn't rule out a spike into the hundreds for WTI. I think realistically, particularly with OPEC spare capacity out there, they've got a couple million bbl a day. We've got an economy that's still a little nervous about a recession, I think, and what I'm using is an average price for the next four years of $80/ bbl for WTI. And will we be below that for some time? Sure. Will we be above it like we are now? Yes. I think $80 is a good equilibrium price and if we're well below it, it's going to be something demand related is my guess, a problem with demand. And if we're higher than that, it's some sort of stagflation spike that probably will result in demand destruction.

JB: So what are those kind of macro external factors we're looking at? You mentioned OPEC+ with Russia to everything going on in Ukraine. China demands.

DP: What's interesting is what probably isn't one of the factors that we need to worry too much about is the U.S. supply was the story during the shale boom. It was the story in the shale bust. Right now we've got a very disciplined U.S. oil and gas industry that I think is spending such that production grows a little but not a lot. So what do we have to watch? I think it's Saudi Arabia and what they want. I think Russia atrophies over time, but I don't think they're the big part of the story from OPEC. It's Saudi is the story there and we have to watch and see what all these high interest rates really mean. It feels like we're sort of on the verge of the economy slowing. Will it slow enough to meaningfully dent oil demand? I doubt it, but that to me is the biggest wild card.

JB: We're talking about oil but what about natural gas? The long-term sustainability there with all the LNG growth going on?

DP: Sure. Natural gas it's the least bad hydrocarbon if you're thinking about sort of all of the net zero type of dynamics. Natural gas right now in the U.S. has a lot of visibility for forward demand. We're going to add several new LNG facilities between here and the end of 2025. And so probably we're going to take our LNG export capacity up by over 50%. I think that'll be price supportive. The forward price curve today, that spot markets in the mid twos in next year, it looks like it's in the mid threes and 2025 it looks like it's in the high threes. Those feel like realistic prices. So I think there's more profitability coming to the gas side of the equation and we're going to be a long-term supplier of LNG to the global market. And as we look out over the next 15 or 20 years, I think we'll see the U.S. continue to take some shares. So exports are going to be an even bigger part of the gas equation here in the U.S.

JB: Great. Thanks again so much for joining us here at the Energy Capital Conference. Really appreciate it. To read and watch more, please visit online at hartenergy.com.

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