A Look into the Future: Oil and Gas Development in the Rocky Mountain West

Throughout the last decade, domestic energy development has received significant attention. Political instability in energy rich countries, wars in Iraq and Afghanistan and continued economic prosperity in developing nations like China and Brazil have led to increases in commodities in the United States and abroad. As it stands today, the two main goods most affected in the United States have been food and fuel. However, based on our nation’s ability to produce excess food, the average American has noticed these progressions more in the prices of energy, something our nation does not produce in excess.
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Oil and Gas Exploration in the Next Five Years

Five years ago the average American was not familiar with “Shale Gas” and any utterings of energy independence were found on little-noticed billboards dotted with wind turbines, solar panels and electric cars sponsored by activist groups. The United States has been a net importer of oil for decades and has seen that consumption deficit increase year after year with no signs of slowing, regardless of the ruminations of politico after politico after politico. That is just the way it is….or was.
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Financing Drivers for U.S. Land-based Exploration and Production Activities

The U.S. market has experienced a strong and steady rebound in rig count from the trough witnessed in mid-2009. Ironically, the same reasons that collapsed the rig count (a decline in commodity prices and poor capital market conditions), has also facilitated the rebound. More importantly, we are seeing strong interest in the sector from lenders due to the acceptance that the current level of production activity and collateral values will be sustainable. This has the potential to allow a continued high level of drilling activity in the intermediate term.
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The Future Dynamics of Oil and Gas Exploration

Over the next five to 10 years, hydrocarbon extraction worldwide will face three overarching challenges
(1) the rising cost of exploration and production (E&P)
(2) the balance between conventional and unconventional sourcing
(3) the technical challenge of maintaining field profitability.
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