Davidson: Five questions to keep in mind in today’s energy industry

Charles “Chuck” Davidson, chairman of Noble Energy and keynote speaker at NAPE’s second annual business conference in Denver on Wednesday, encouraged conference attendees to focus on five questions in terms of the long-term fundamentals of the business, asking “where do we need to be in 2020?”

Oil and gas professionals gathered at NAPE’s second annual business conference at the Denver Convention Center, along with industry leaders to discuss the path forward in the resource-rich region. The day-long conference was presented by the Independent Petroleum Association of America (IPAA) and Dan Naatz, vice president Federal Resources & Political Affairs introduced Noble’s Davidson to attendees.

Noting his questions did not have definitive black and white answers, Davidson asked the audience to think about the impact of growing US production on oil prices, growing environmental challenges to US conventional resource development, and the importance of diversification.

First, will domestic oil prices collapse under the weight of growing US production...or have they already? Or, he asked, is the US production causing the collapse of global prices?

Secondly, “How should one think about the constant (growing) environmental challenges to US unconventional resource development?” he asked, noting that “winners will be those who are transparent, proactive and who are seen as problem solvers.”

Next, do unconventional resource plays require a different approach in planning for the future?

In addressing the US natural gas market, and whether it makes sense for US natural gas to be priced at deep discounts to oil for an extended period of time, Davidson pointed to the “extraordinary bargain” the country is getting for natural gas and the need for export restrictions to be lifted in the US.

Moving to his final question, Davidson asked how a producer or investor should position themselves for “peak shale”?

“Every time we get comfortable projecting the future, something changes,” he said. “We need to focus on the long-term fundamentals of our business.”



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