Leslie’s Notebook

Here are some choice comments from XTO Energy chairman and CEO Bob Simpson, speaking at the 13th annual EnerCom Oil and Gas Conference in Denver this week. The rapt and over-flow audience frequently laughed at some of his comments, that touched on all aspects of the U.S. natural gas scene.  

 On shale M&A: “The majors are pretty much sitting on their thumbs, but they’ve got to be watching this [shale boom]. Yeah, BP bought that Woodford stuff from Chesapeake for $1.7 billion. That pretty much validates it. This shale thing is real, so the next [M&A] event is coming.”

On the Bakken shale: “The Bakken is a new franchise for us. I saw where one company’s market cap went up $2 billion based on one well announcement there, so I’m thinking, one well is worth $2 billion! So I sent my guys up there to check it out, and I hope to have one of those soon!”

On the so-called land grab: “We’re known as a good capital allocator and trust me, I’m not into being a land-grab player. But I think there’s some value there. Next year I don’t want to be showing you my acreage or an acquisition. I want to show you a well announcement.” 

On hedging: “When oil was running up to $140 and gas to $13, people were saying to me, ‘Gee, I hope you are not hedged’ Now that the prices have come down, The Street is saying, ‘Gee, I hope you are hedged.’”  

On a potential gas glut: “U.S. onshore gas production is up 8%. Everybody is asking me, Are we going to drown in gas? But this year we just got back to the production we had in 2001! Do I believe we can continue that growth of 8%? No. The underlying decline curve is great. If we stopped drilling for a year, we’d lose four Barnett shales. It’s easy to fall for the trap that all these shales add up…but in truth, some gas is disappearing at the same time.”  

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