?What is going on here? Are the solar flares worse than usual? In mid-July, a Belgian brewer bought our largest beer maker, Anheuser-Busch, for $52 billion. An Abu Dhabi investment fund bought 75% of the Chrysler building in Manhattan. And, the market cap of Newfield Exploration Co. was nearly $1 billion higher than GM’s!


At press time, the market caps of shale players Newfield, Petrohawk Energy Corp. and Range Resources Corp. had each surpassed that of General Motors, which had fallen to about $6.5 billion. And, the $12-billion market cap of Ultra Petroleum outpaced that of Ford’s $11.5 billion.


Wow. Former GM president Charlie Wilson famously said in a Senate hearing in the 1940s that what’s good for GM is good for the nation, and vice versa. Today, shall we say that what’s good for Newfield is good for the nation?


But wait. Lest we oil and gas people, who are riding the crest of a big commodity wave, get too proud, remember that hamburgers and fries outrank thousands of shale acres. The market cap of McDonald’s is $68 billion, or twice that of Chesapeake Energy. And the market cap of Bed, Bath & Beyond, at $7.39 billion, edged out Newfield, which was at $7.35 billion as of July 16.


The world is upside down over oil and gas. Oil falls by seven bucks and is still more than $130 a barrel. A Pew Research poll shows that for the first time, 47% of the American public favors a bit more U.S. drilling over conservation and alternative fuels.
What’s next? Every person and group of note has proposed an energy plan, from both political parties to President Bush, to any number of think tanks, consumer groups, trade associations and practicing geologists.


T. Boone Pickens laid out his plan at our Energy Capital Forum in Houston on June 10. (For video of his remarks, go to OilandGasInvestor.com.) A month later, in a press conference in New York City, he went nationwide with it, and his public service TV spots began running.


In these, he says that although he’s been an oilman all his life, “we can’t drill our way out of this one.” Pickens advocates developing more wind power for electricity generation, and using the natural gas thus saved for fuel in vehicles, thereby reducing our need for oil.
At about the same time, the National Governors Association’s annual meeting revolved around energy as well, as did demonstrations in Washington.


BBC World News televised an energy debate in Houston with Mayor Bill White, new Shell Oil (US) Co. president Marvin Odum, a vice president of Nissan North America, an editor from The Economist, and energy guru Amy Myers Jaffe of the Baker Institute at Rice University.


“The industry may have discovered most of the more easily found and prolific fields. Wells have tended to become deeper, and consequently, more costly; less total oil has been found per foot drilled. There will have to be continued improvements in oil finding and producing technology.”


This is more or less what the panel said, and it also sounds like what we’ve heard every day for the past few years. But, think again.


In reality, this is a direct quote from “World Oil,” a special report from the Financial Times—published in 1958! The report was found in an antique-shop in the Texas Hill Country this summer.


FT’s 1958 report cited a U.S. recession. It said that, in 1957, some 14,707 exploratory wells were drilled, but operators complained that E&P costs had surged 300% since the end of World War II.


U.S. production was 7.7 million barrels a day in March 1957, about 42% of total world oil production.


An article by the chief geologist for BP Exploration Ltd. cited possibilities in oil-shale deposits in Colorado and tar sands in Alberta, as well as vast potential offshore, although “at present, it is possible to drill in water depths of 200 feet at most….”
He mentioned the political instability of the Middle East, and that the oil industry’s focus was shifting to the East.


The more things change….

We are gearing up to bring you lots more insight on shales and tight gas. That’s why we are pleased to announce a new conference: Developing Unconventional Gas—Appalachia at the Pittsburgh Hilton on November 6. It is modeled after our highly popular DUG held each year in Fort Worth.


Also coming soon is our 7th annual A&D Strategies & Opportunities Conference in Dallas on September 4, with A&D—The Workshop on September 3.


Finally, the 3rd annual Recruiting & Retention Conference is scheduled for October 28 in Houston. New this year is a dinner on October 27 honoring energy companies whose employees rate them the best energy employers. Go to HartEnergyConferences.com for more information on all of these events.

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